Madras HC quashed a GST search where the authorisation failed to clearly mention the power exercised under Section 67; DIN must be shared, and coercive payments are not voluntary.
GST Search Authorisation Must Clearly Specify Power: Madras HC
The Madras High Court quashed a GST search conducted by revenue authorities, holding that the authorisation issued under Section 67 of the CGST Act must clearly specify the power being exercised. The Court found that the authorisation in question was vague and did not disclose the designation and DIN (Directorate Identification Number) of the authorised officer.
The authorisation under Section 67 must be transparent, specific, and disclose the identity and authority of the officer, failing which the search violates principles of natural justice and statutory compliance.
The Court also ruled that any payment of tax during a search under coercion cannot be deemed voluntary. It reiterated that compliance obtained under pressure is invalid and does not absolve the taxpayer of rights to a fair hearing. This reinforces safeguards against arbitrary exercise of search powers under GST law.
Implications for Practitioners
Practitioners must scrutinise authorisation orders before any search. Absent specificity in the order—especially non-disclosure of DIN or ambiguous delegation—the search may be challenged as illegal. The judgment strengthens procedural due process in tax investigations.
