[Cites 17, Cited by 0]
Madhya Pradesh High Court
Rahul Dubey vs Principal Commissioner Of Central ... on 12 March, 2026
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2026:MPHC-JBP:18366
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IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE PRADEEP MITTAL
ON THE 12th OF MARCH, 2026
WRIT PETITION No. 32952 of 2025
ANKIT DUBEY
Versus
PRINICIPAL COMMISSIONER OF CENTRAL GOODS AND SERVICE
TAX CGST BHOPAL GST BHAWAN AND OTHERS
Appearance:
Shri E Krishnadas and Shri Ayush Gupta - Advocates for the
petitioner.
Shri Shreyas Dubey - Government Advocate for the respondents/State.
WITH
WRIT PETITION No. 32936 of 2025
RAHUL DUBEY
Versus
PRINCIPAL COMMISSIONER OF CENTRAL GOODS AND SERVICES
TAX BHOPAL AND OTHERS
Appearance:
Shri E Krishnadas and Shri Ayush Gupta - Advocates for the
petitioner.
Shri Shreyas Dubey - Government Advocate for the
respondents/State.
WRIT PETITION No. 33175 of 2025
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RAJESH DUBEY PROPRIETOR M/S RIA ENTERPRISES
Versus
PRINCIPAL COMMISSIONER OF CENTRAL GOODS AND SERVICES
TAX (CGST) AND OTHERS
Appearance:
Shri E Krishnadas and Shri Ayush Gupta - Advocates for the
petitioner.
Shri Rajvardhan Datt Parhraha - Government Advocate for the
respondents/State.
RESERVED ON : 25.02.2026
PRONOUNCED ON : 12.03.2026
.......................................................................................................................................................
ORDER
Per: Justice Vivek Rusia
Since identical questions of fact and law are involved in these Writ
Petitions, all these matters are being decided by this common order. For the
sake of convenience, the facts are being taken from Writ Petition
No.32952/2025 to decide the controversy involved therein.
2. The petitioner, being a proprietor of M/s Avi Enterprises, has filed
the present petition under Article 226 of the Constitution of India against the
search orders dated 18.10.2024 and 19.10.2024 carried out by respondents -
Central GST Authorities under Section 67(2) of the Central Goods and
Services Tax Act, 2017 (in short "CGST Act, 2017" ). The petitioner, by way
of this petition, is seeking a declaration that search and seizure proceedings
carried out on 18.10.2024 and 19.102024 be declared illegal, null and void
and also quash all the consequential proceedings. The petitioner is further
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seeking direction to the respondents to return all the document books,
accounts and records seized during the search etc.
Facts of the case, in short, are as follows :-
3. The petitioner is a Proprietary Firm possessing an MSME
registration certificate under the "Micro" category and carrying on business
as a Retail Trader primarily of Ceramic Tiles, besides Sanitary Fittings. The
petitioner is also registered under the Goods and Services Tax Act, 2017 and
has been regularly filing the GST Returns since registration.
4. On 18.10.2024 at around 01:00 P.M., the Officers of Central GST
conducted a search and raid in the business premises, residential premises
and three godowns (shared by the petitioner with other firms run by his
relatives i.e. father and brother), the details of which are as under:-
a. Showroom of M/s Avi Enterprises, situated at G-10, Tilak Nagar
Market, E-8 Extension, Bawadiya Kalan, Bhopal.
b. Residential premises of Petitioner at D-6, Tilak Nagar, Bhopal.
c. Residential premises of his relatives at D-23, Tilak Nagar, Bhopal.
d. Godown situated at House No. B-7, Tilak Nagar, Bhopal.
e. Godown situated at Laxmi Parisar Shops (near Avi Enterprises
Showroom), Bawadiya Kalan, Bhopal.
f. Godown near Mansarovar Dental College, Kolar, Bhopal.
5. According to the petitioner, the search was conducted under
Section 67(2) of the CGST Act, 2017, without issuing any Search Warrant
by the Magistrate, whereas it was conducted as per the order issued by the
Respondent No.2 - Joint Commissioner, Central Goods and Services Tax,
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Bhopal. It came to the notice of the search team that the godowns where the
goods were stored had not been registered under the GST provisions and,
therefore, such goods would be treated as "unaccounted goods".
6. According to the petitioner, only the principal place of business is
liable to be registered under the GST Act, 2017, whereas the entire stock of
goods kept in the godowns is duly accounted in "TALLY-ERP" accounting
software. The petitioner bona fide showed the respondents, Authorities, their
stock statements in the computer available at the principal place of business
and also the GST Returns and statements on the GST Portal about the
declaration of these goods.
7. According to the petitioner, the respondents prepared the
Panchnama of the search at the Principal place of business, even though the
respondents pressurised the petitioner to deposit Rs. 40 - 50 Lakhs through
Form DRC03 as a voluntary deposit of taxes, failing which he would have to
face serious consequences. The petitioner did not succumb to their pressure
and; hence, in order to take coercive actions, the respondents - Authorities
have seized documents and records including Purchase-Invoices, Sales-
invoices book, Stock-statements, various files relating to Accounts, Sales,
Purchases Delivery Challans, Order-book, Payments-receipts book, Balance
Sheet, Profit & Loss statement, LTRs, Form-26, TDS Statements relating to
petitioner's business without giving any reason for seizure except that these
documents have to be seized by them for investigations.
8. According to the petitioner, the respondents- Authorities also
examined the Purchase Bills, Sales Bills and Challan Registers relating to
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two other businesses run by family members of the petitioner, namely; M/s
Goura Traders run by his brother and M/s Ria Enterprises run by his Father.
The respondents also took the printout of many ledgers and data relating to
the purchase and sale of the goods and stock from the computer. They also
extracted the data from the computer on pen-drive which they subsequently
sealed and seized.
9. The search continued on 19.10.2010 in the godown at Kolar,
Bhopal, in which the petitioner extended his full cooperation. The petitioner
requested Respondent No.2 for the de-sealing of their godown because their
trading activities had come to a halt due to the seizure of goods and sealing
of the godown. The petitioner also requested for providing copies of the
complete documents relating to the search and seizure and the remaining
panchnama, which were not already provided in terms of Section 67 of the
GST Act, 2017. According to the petitioner, the Respondent No.2 also
advised to deposit at least Rs.40 Lakhs as a voluntary deposit of tax.
10. The Investigating Officer issued a summons under Section 70 of
the CGST Act, 2017 on 11.11.2024, calling upon the petitioner to appear on
12.11.2024 to record a statement in connection with "GST evasion" in
accordance with the GST Act, 2017. The petitioner submitted a response on
summons to Respondent No.5 vide letter dated 12.11.2024, followed by
Written Statement under Affidavit dated 19.11.2024 and letter dated
18.12.2024.
11. According to the petitioner, after approaching this Court by way
of W.P. No.38344/2024, which came up for hearing on 16.12.2024, the GST
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Department vide E-mail dated 13.12.2024 forwarded all the copies of
panchnama, annexures and seizure orders with annexures relating to the
search conducted on 18.10.2024 and 19.10.2024. The petitioner sent a letter
under Section 165(5) of Cr.P.C. to the Respondent No.1 to provide copies
relating to the Proper Officer's recording of his "reasons to believe" before
initiating the search.
12. The petitioner further says that , the period of six months had
elapsed since seizure of the goods, but no action has been taken till date by
the Proper Officer. The goods seized by the respondents - Authorities are still
lying in their possession and the petitioner is not able to sell/supply them.
The entire business of the petitioner is being hampered because the
respondents have seized all the necessary documents, computer ledgers etc.
Hence, the petitioner has approached this Court by way of the present Writ
Petition challenging the search and seizure on various grounds.
The Reply of the respondents
13. After notice, the respondents- Authorities have filed the
preliminary reply by submitting that the petition is not only misconceived
but filed at a premature stage. It is further submitted that in pursuance of the
investigative process of search and seizure done by the respondent between
18.10.2024 and 19.10.2024, a show cause notice dated 02.07.2025 has
already been issued under the provisions of Section 74(1) and Section 74(5)
(a) of the CGST Act, 2017. The petitioner has been called upon to submit the
reply and participate in the proceedings. The petitioner has an alternate
remedy of filing an application for provisional release of the seized goods
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under Section 67(6) of the CGST Act, 2017, read with Rule 140(1) of the
CGST Rules, 2017. The petitioner shall have the liberty to furnish a bond to
seek provisional release of the seized goods.
14. Further, it is submitted that the GST Officers were authorised by
the Joint Commissioner, CGST, Bhopal, for searching Section 67(2) of the
GST Act, 2017 at the registered premises as well as the unregistered
godown. The Joint Commissioner, CGST, Bhopal, is a proper officer for the
issuance of such authorisation under Section 67(2) of the CGST Act, 2017. It
is further submitted that the respondent Department has reasons to believe
that the petitioner, along with two related firms, namely M/s Goura Traders,
Bhopal and M/s Ria Enterprises, are engaged in clandestine supply of
ceramic tiles, sanitary fittings etc., without issuing any tax invoice and
applying their taxable turnover and their evading of tax. The taxable goods
were seized under INS02 of the panchnama dated 18.10.2024 and
19.10.2024.
15. It is a case of the respondent that during the search,
approximately thirteen thousand boxes of ceramic tiles of a different brand
were found kept in a secret, undeclared, unregistered godown, which were
not added in the GST registration as an additional premises of the business,
therefore, the GST, Bhopal had reasons to believe that the said goods were
stored at premises without having any valid document for evasion of tax
liabilities . During the investigation, the petitioner did not produce any
purchase invoice or stock register related to the seized goods. Therefore, the
search and seizure cannot be said to be declared illegally void. The three
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godowns, first, near Mansarovar Dental College, Kolar, Bhopal; second, near
House No.B-7 Tilak Nagar, Bhopal and third at Laxmi Parisar Shops, were
found off the record.
16. Shri Shreyas Dubey, learned Government Advocate appearing
for the respondents, submits that the respondents are ready to handover all
the goods to the petitioner subject to production of valid bills, challan,
receipts etc. After re-verification, a total of 1455 boxes of tiles were found to
be shocked. In view of the above, the learned Government Advocate prays
for dismissal of the Writ Petitions.
17. Learned counsel for the petitioner argued at length. He has taken
us to the various provisions of the GST Act, 2017, related to authorisation,
search and seizure. Learned counsel has placed reliance on the judgments
"Union of India vs. Magnum Steel Ltd., [(2023) 4 Centax 106 (SC)]", "L.J.
Rao, Assistant Collector of Customs vs. Bibhuti Bhushan Bagh, [(1989) 42
E.I.T. 338 (SC)]", "Bishnu Krishna Shrestha vs. Union of India and others,
[(1987) (27) ELT 369 (Cal)]" and "Commissioner of Commercial Taxes and
others vs. Ramkishan Shrikishan Jhaver and others, [(1967) SCC OnLine SC
31]" to buttress his submissions.
Conclusion.
18. After hearing the parties and keeping in view the facts and
circumstances, we are of the considered opinion that all these petitions have
been filed at a premature stage because after completion of the search and
seizure, the notice under Section 74 has been issued to the petitioners. The
petitioners are required to participate in the proceedings and, thereafter, they
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may challenge the Order-in-Original if the occasion so arises. In the case of
"CIT v. Laljibhai Kanjibhai Mandalia" , reported in (2022) 16 SCC 139, the
Supreme Court of India has held as under in respect of the scope of judicial
review under Article 226 of the Constitution of India :-
"36. In a celebrated judgment of this Court in " Tata
Cellular v. Union of India [Tata Cellular v. Union of
India, [(1994) 6 SCC 651]" , on the scope of judicial
review, though in the context of tenders, is very well
applicable to the powers or limitations of the Courts
while exercising the jurisdiction under Article 226 of
the Constitution. One of the principles is that of judicial
restraint. This Court held that : (SCC pp. 676, 678, 680-
81 & 687, paras 73-74, 78, 80, 82 & 94)
"73. Observance of judicial restraint is currently the
mood in England. The judicial power of review is
exercised to rein in any unbridled executive
functioning. The restraint has two contemporary
manifestations. One is the ambit of judicial intervention;
the other covers the scope of the court's ability to quash
an administrative decision on its merits. These restraints
bear the hallmarks of judicial control over
administrative action.
74. Judicial review is concerned with reviewing not the
merits of the decision in support of which the
application for judicial review is made, but the decision-
making process itself.
***
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78. What is this charming principle
of Wednesbury [Associated Provincial Picture Houses
Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 (CA)]
unreasonableness? Is it a magical formula?
In R. v. Askew [R. v. Askew, (1768) 4 Burr 2186 : 98
ER 139] , Lord Mansfield considered the question
whether mandamus should be granted against the
College of Physicians. He expressed the relevant
principles in two eloquent sentences. They gained
greater value two centuries later : (R. case [R. v. Askew,
(1768) 4 Burr 2186 : 98 ER 139] , ER p. 141)
'It is true, that the judgment and discretion of
determining upon this skill, ability, learning and
sufficiency to exercise and practise this profession is
trusted to the College of Physicians; and this Court will
not take it from them, nor interrupt them in the due and
proper exercise of it. But their conduct in the exercise
of this trust thus committed to them ought to be fair,
candid and unprejudiced; not arbitrary, capricious, or
biased; much less, warped by resentment, or personal
dislike.'
***
80. At this stage, The Supreme Court Practice, 1993,
Vol. 1, pp. 849-850, may be quoted:
'4. Wednesbury [Associated Provincial Picture Houses
Ltd. v. Wednesbury Corpn., (1948) 1 KB 223
(CA)] principle.--A decision of a public authority will
be liable to be quashed or otherwise dealt with by an
appropriate order in judicial review proceedings where
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the court concludes that the decision is such that no
authority properly directing itself on the relevant law
and acting reasonably could have reached it.
(Associated Provincial Picture Houses
Ltd. v. Wednesbury Corpn. [Associated Provincial
Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1
KB 223 (CA)] , per Lord Greene, M.R.)'
***
82. Bernard Schwartz in Administrative Law, 2nd Edn.,
p. 584 has this to say:
'If the scope of review is too broad, agencies are turned
into little more than media for the transmission of cases
to the courts. That would destroy the values of agencies
created to secure the benefit of special knowledge
acquired through continuous administration in
complicated fields. At the same time, the scope of
judicial inquiry must not be so restricted that it prevents
full inquiry into the question of legality. If that question
cannot be properly explored by the Judge, the right to
review becomes meaningless. "It makes judicial review
of administrative orders a hopeless formality for the
litigant. ... It reduces the judicial process in such cases
to a mere feint."
Two overriding considerations have combined to
narrow the scope of review. The first is that of
deference to the administrative expert. In Chief Justice
Neely's words:
"I have very few illusions about my own limitations as a
Judge and from those limitations I generalise to the
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inherent limitations of all appellate courts reviewing
rate cases. It must be remembered that this Court sees
approximately 1262 cases a year with five Judges. I am
not an accountant, electrical engineer, financier, banker,
stock broker, or systems management analyst. It is the
height of folly to expect Judges intelligently to review a
5000 page record addressing the intricacies of public
utility operation."
It is not the function of a Judge to act as a superboard,
or with the zeal of a pedantic schoolmaster substituting
its judgment for that of the administrator.
The result is a theory of review that limits the extent to
which the discretion of the expert may be scrutinised by
the non-expert Judge. The alternative is for the court to
overrule the agency on technical matters where all the
advantages of expertise lie with the agencies. If a court
were to review fully the decision of a body such as
State board of medical examiners "it would find itself
wandering amid the maze of therapeutics or boggling at
the mysteries of the pharmacopoeia". Such a situation
as a State court expressed it many years ago "is not a
case of the blind leading the blind but of one who has
always been deaf and blind insisting that he can see and
hear better than one who has always had his eyesight
and hearing and has always used them to the utmost
advantage in ascertaining the truth in regard to the
matter in question".
The second consideration leading to narrow review is
that of calendar pressure. In practical terms it may be
the more important consideration. More than any theory
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of limited review it is the pressure of the judicial
calendar combined with the elephantine bulk of the
record in so many review proceedings which leads to
perfunctory affirmance of the vast majority of agency
decisions.'
***
94. The principles deducible from the above are:
(1) The modern trend points to judicial restraint in
administrative action.
(2) The court does not sit as a court of appeal but
merely reviews the manner in which the decision was
made.
(3) The court does not have the expertise to correct the
administrative decision. If a review of the
administrative decision is permitted it will be
substituting its own decision, without the necessary
expertise which itself may be fallible.
(4) ...."
37. The power of judicial review and interference by the
Courts in the matters of disciplinary proceedings was
being examined in the judgment of this Court reported
as Indian Oil Corpn. Ltd. v. Rajendra D.
Harmalkar [Indian Oil Corpn. Ltd. v. Rajendra D.
Harmalkar, (2022) 17 SCC 361 : 2022 SCC OnLine SC
486] . It was held that interference was not permissible
unless the order was contrary to law, or relevant factors
were not considered, or irrelevant factors were
considered, or the decision was one which no
reasonable person could have taken.
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38. In another judgment reported as Utkal
Suppliers v. Maa Kanak Durga Enterprises [Utkal
Suppliers v. Maa Kanak Durga Enterprises, (2021) 14
SCC 612] , this Court was examining tender conditions
in a writ petition. It was held that judicial review in
these matters is equivalent to judicial restraint.
39. In the light of judgments referred to above, the
sufficiency or inadequacy of the reasons to believe
recorded cannot be gone into while considering the
validity of an act of authorisation to conduct search and
seizure. The belief recorded alone is justiciable but only
while keeping in view the Wednesbury [Associated
Provincial Picture Houses Ltd. v. Wednesbury Corpn.,
(1948) 1 KB 223 (CA)] Principle of Reasonableness.
Such reasonableness is not a power to act as an
appellate authority over the reasons to believe recorded.
35. Even clause (c) of Section 132(1) is satisfied. The
assessee was in possession of Rs 10 crores which was
advanced as loan to the Company. The Revenue wishes
to find out as to whether such amount is an undisclosed
income which would include the sources from which
such amount of Rs 10 crores was advanced as loan to a
totally stranger person, unconnected with either the
affairs of assessee or any other link, to justify as to how
a person in Ahmedabad has advanced Rs 10 crores to
the Company situated at Kolkata in West Bengal for the
purpose of investment in Goa. The Revenue may fail or
succeed but that would not be a reason to interfere with
the search and seizure operations at the threshold,
denying an opportunity to the Revenue to unravel the
mystery surrounding the investment made by the
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assessee."
As to the release of the seized goods, the respondents have fairly stated
that they are ready to release the goods, subject to the production of valid
documents, etc., but the petitioners have not produced any valid documents
to obtain the release of the tiles. In view of the above, we are of the opinion
that the petitioner has not been able to make out a case for exercising
jurisdiction of this Court under Article 226 of the Constitution of India.
Therefore, the prayers made in the present writ petition cannot be granted.
Accordingly, the writ petition is dismissed.
19. In view of the above, the present Writ Petitions are dismissed.
(VIVEK RUSIA) (PRADEEP MITTAL)
JUDGE JUDGE
Shivani
Date: 2026.03.12 14:52:30 +05'30'
