Rajasthan High Court declines to interfere with GST search, sealing and bank attachment: Murliwala Pigment Vs Union of India

Background and Scope of the Decision

The Rajasthan High Court in Murliwala Pigment Vs Union of India declined to exercise its writ jurisdiction under Article 226 of the Constitution to set aside actions taken by GST authorities, including:

  • Sealing of four business premises,
  • Provisional attachment of bank accounts through DRC-22 dated 12.03.2026, and
  • Seizure of goods pursuant to a search under Section 67(2) of the CGST Act 2017.

The assessee, registered under the Rajasthan Goods and Services Tax Act, 2017, sought constitutional relief instead of pursuing statutory remedies under the CGST Act and Rules. The Court examined the legality of the search, seizure, sealing of premises and provisional bank attachment, and whether the writ petition was maintainable in the presence of alternative remedies.

Reliefs Sought by the Assessee

The writ petition prayed for multiple directions against the GST authorities, broadly seeking:

  1. Quashing of sealing orders

    • A writ of certiorari/mandamus to set aside the orders by which four business premises, including the head office and additional places of business, had been sealed.

  2. Quashing of DRC-22 and bank attachment

    • A writ of certiorari/mandamus to annul DRC-22 dated 12.03.2026 and a consequential direction to de-attach the bank accounts, alleging that the attachment was in complete disregard of the CGST Act provisions.

  3. Protection against coercive steps

    • A writ of mandamus restraining the authorities from taking coercive measures against the assessee, contending that the assessee was unable to appear due to allegedly unlawful actions of the department.

  4. General relief

    • Any other order deemed just and appropriate in the circumstances.

Assessee’s Core Contentions

1. Misuse of power under Section 67

The assessee argued that:

  • Section 67 does not authorize sealing of entire business premises or freezing of bank accounts merely because summons have been issued or a search has been initiated.
  • The actions taken were described as arbitrary and a form of harassment going beyond the statutory framework.

2. Reliance on Section 6(2)(b) and Armour Security (India) Ltd.

The assessee strongly relied on the Supreme Court decision in M/s. Armour Security (India) Ltd. Vs. Commissioner, CGST Delhi, East Commissionerate and Ors. reported as 2025 INSC 982, and contended that:

  • Under Section 6(2)(b) of the CGST Act, “initiation of any proceedings” commences only with the issue of a show cause notice under provisions such as Section 73.
  • Summons under Section 70, search operations, or seizure do not amount to formal adjudicatory proceedings.
  • Therefore, according to the assessee, the department could not treat mere non-compliance of summons as a basis for drastic coercive steps such as sealing premises or freezing accounts.

3. Lack of jurisdiction and abuse of authority

The assessee further alleged:

  • The entire course of action, including search, sealing, and attachment, lacked jurisdiction.
  • Provisional attachment of bank accounts under Section 83 was said to be in “complete violation” of the statute and guidelines.
  • Objections / detailed replies submitted by the assessee were allegedly not considered before initiating action.

4. No efficacious alternative remedy

It was urged that:

  • Except invoking writ jurisdiction for de-sealing of premises and de-attachment of bank accounts, the assessee had no practical remedy.
  • The continuation of sealing had paralysed day-to-day operations, justifying direct recourse to Article 226.

The assessee requested that, at the minimum, business premises be opened to allow operations, even if seized goods remained under seal.

Stand of the Respondents (GST Authorities)

The departmental counsel opposed the writ by emphasising:

  • Search under Section 67(2):
    On 10.03.2026, officers authorised under Section 67(2) conducted search operations at multiple locations linked with the assessee. During this exercise:

    • Goods were seized,
    • Four business premises were sealed, and
    • Bank accounts were provisionally attached under Section 83 to safeguard government revenue.

  • Non-cooperation of the assessee:
    The assessee did not appear despite repeated summons and chose to only submit replies, avoiding personal appearance and production of documents as required by Section 70.

  • Availability of statutory remedies:
    The assessee had:

    • Remedies under Section 67(6) read with Rules 140 and 141 of the CGST Rules for provisional release of seized goods and de-sealing of premises, and
    • Recourse under the law to challenge or seek modification of provisional attachment.