ISSUE INVOLVED
Whether GST authorities can conduct search and seizure proceedings against an assessee operating in SEZ? {Section 8 and Section 13 of IGST Act,2017}
HELD THAT
State GST authorities are empowered to conduct search and seizure proceedings against an assessee operating in an SEZ unit.
Case Reference : [2023] 151 taxmann.com 134 (Gujarat)
Contributed By
Jyotsana Thareja
Technical Trainee – GST
jyotsanathareja@mehragoelco.com
CA Vaibhav Jain
Partner
vaibhavjain@mehragoelco.com
Facts of the Case:
Revenue :
The case involves the State GST authorities, who conducted search and seizure proceedings against an assessee operating in a Special Economic Zone (SEZ). The revenue department sought to exercise its jurisdiction and carry out investigations, inspections, and seizures at the premises of the petitioner.
Petitioner :
The petitioner, in this case, is RHC Global Exports (P.) Ltd., an entity operating within the SEZ. They contested the jurisdiction of the State GST authorities and argued that their business premises, being situated in an SEZ, should be treated as foreign territory. They claimed that the respondent authorities had no jurisdiction to conduct search proceedings at their premises.
Judgement:
State GST authorities are empowered to conduct search and seizure proceedings against an assessee operating in an SEZ unit.
Summary:
In the case of RHC Global Exports (P.) Ltd., the issue at hand was the jurisdiction of State GST authorities to conduct search and seizure proceedings against an assessee operating in a Special Economic Zone (SEZ). The petitioners argued that as their business premises were situated in an SEZ, the State GST authorities had no authority to carry out search proceedings.
The court examined the relevant provisions of the SEZ Act and the GGST Act and found that the Central Government had authorized the officers of the State GST authorities to conduct search, seizure, investigation, or inspection in SEZs through a notification. Therefore, the court concluded that the respondent authorities had the lawful authority to carry out the proceedings.
The court also noted that accepting the petitioners’ arguments would undermine the purpose of the IGST Act and create inconsistencies between the SEZ Act and the GST Act. Additionally, the Development Commissioner of the SEZ was duly informed before the search and seizure proceedings took place. As a result, the court rejected the petitioners’ claims as unworthy of acceptance.