Seized residential CCTV footage can only be accessed with strict safeguards to protect the taxpayer’s privacy.
Issue
How should tax authorities handle the seizure and inspection of CCTV footage from a taxpayer’s residential premises in a way that balances the legitimate needs of an investigation with the taxpayer’s fundamental right to privacy?
Facts
- During a search and seizure operation at the residential premises of an assessee, GST officials seized various electronic devices. This included the hard disk that contained the CCTV footage from the residence.
- The assessee filed a writ petition, arguing that the search was improper and, more importantly, that the seizure and potential viewing of their family’s private CCTV footage was a violation of their fundamental right to privacy.
Decision
The High Court’s decision was procedurally in favour of the revenue, as it upheld the legality of the search and seizure action itself. However, it provided significant relief to the assessee by laying down strict rules to protect their privacy.
- The court found that the search was properly initiated to investigate alleged tax evasion and was not illegal.
- However, recognizing the serious privacy concerns, the court did not allow the GST department to have unrestricted access to the footage.
- It prescribed a detailed and mandatory safeguarded procedure that must be followed:
- The officials cannot access the residential footage on their own.
- The hard disk containing the footage must be accessed only in the presence of at least one of the assessee’s family members and one authorized representative (like their lawyer or CA).
- After the footage is viewed jointly, the GST department is permitted to only copy the specific portions that are actually relevant to their investigation.
- All remaining footage that is personal or family-related and not relevant to the case must be returned to the assessee.
- The court also specified that any personal or family-related footage cannot be used or disseminated in any manner.
Key Takeways
- The Right to Privacy is a Factor, Even in a Tax Search: The court’s order is a strong affirmation that the right to privacy, recognized as a fundamental right, must be respected by tax authorities even when they are exercising their statutory powers of search and seizure.
- A Balancing Act by the Judiciary: This judgment is a classic example of the judiciary performing a balancing act. It upholds the state’s power to investigate economic offenses while simultaneously protecting the individual’s right to be free from unwarranted intrusion into their private and family life.
- No Roving Inquiries into Personal Matters: The decision makes it clear that tax authorities cannot use a search as a pretext to conduct a roving inquiry into a taxpayer’s personal and family life. Their access to sensitive personal data like CCTV footage must be strictly limited to what is necessary and relevant to the alleged tax evasion.
- A Procedural Blueprint for Handling Personal Data: The court’s detailed directions provide a clear procedural blueprint for tax authorities across the country. It sets a precedent on how to handle sensitive personal data that is seized during a search, ensuring transparency and protecting the constitutional rights of citizens.
HIGH COURT OF DELHI
Genesis Enterprises
v.
Principal Commissioner CGST Delhi East
PRATHIBA M. SINGH and SHAIL JAIN, JJ.
W.P.(C) No. 13821, 13880, 14183, 14186, 14188, 14210, 14230, 14232 and 14045 OF 2025
CM APPL. NO. 56711, 56865, 58167, 58168, 58176, 58177, 58179, 58180, 58355, 58386, 58387, 58389, 58390 AND 57509 OF 2025
CM APPL. NO. 56711, 56865, 58167, 58168, 58176, 58177, 58179, 58180, 58355, 58386, 58387, 58389, 58390 AND 57509 OF 2025
SEPTEMBER 15, 2025
Bharat Bhushan, Ms. Nidhi Gupta and Anunay Mishra, Advs for the Petitioner. Arun Khatri, SSC, Akash Panwar, JSC, Ms. Anoushka Bhalla, Ms. Tracy Sebastian, Sahil Khurana, Akshay, Pranav, Ms. Shelley, Ms. Jasleen Kaur Anand and Hitesh Nandal, Advs. for the Respondent.
JUDGMENT
Prathiba M. Singh, J. – This hearing has been done through hybrid mode.
Factual Background
2. The present petitions have been filed by the following firms/ entities:
| Writ Petition No. | Firm Name | Name of Proprietor Partner(s)/ Director(s) |
| W.P.(C) 13821/2025 | M/s Genesis Enterprises | Mr. Vikas Gumber and Mr. Abhishek Gumber |
| W.P.(C) 13880/2025 | M/s Kabun Enterprises (Opc) Private Limited | Mr. Vikas Gumber |
| W.P.(C) 14183/2025 | M/s Aayme Sourcing Creations (Opc) Private Limited | Mr. Anurag Gumber |
| W.P.(C) 14186/2025 | M/s A V Enterprises | Mr. Abhishek Gumber and Ms. Somya Gumber |
| W.P.(C) 14188/2025 | M/s Modern Creation | Mr. Ankit Gumber and Ms. Jhanvi Gumber |
| W.P.(C) 14210/2025 | M/s Glitz International | Mr. Vikas Gumber and Mr. Anurag Gumber |
| W.P.(C) 14230/2025 | M/s Fiore Enterprises (Opc) Private Limited | Mr. Vikas Gumber |
| W.P.(C) 14232/2025 | M/s Bexley Creation Enterprises (Opc)Private Limited | Mr. Vikas Gumber |
| W.P.(C) 14045/2025 | M/s Backbone Overseas | Mr. Vikas Gumber and Mr. Anurag Gumber |
3. Details of the ‘Gumber Family’: The Gumber family inter alia, comprises of Mr. Vikas Gumber, his wife – Ms. Bharti Gumber, his sons- Mr. Abhishek Gumber, Mr. Anurag Gumber, Mr. Ankit Gumber and their families.
4. The allegations in the present writ petitions are to the effect that search and seizure has been conducted by the officials of the CGST Department against the Gumber family, in its residential premises, its firms, and various other entities at different premises, in an unlawful manner by the officials of the GST Department.
5. The case of the Petitioners is that unauthorized search was conducted by the officials of the CGST Department, on 22nd July, 2025, wherein the residential premises of the Gumber Family at A-122, Sector 105, Noida, Gautam Buddha Nagar, Uttar Pradesh-201301 (hereinafter, ‘the residential premises’)was raided and a large number of electronic gadgets, documents and devices have been seized. Thereafter, on 24th July 2025, the investigating officers went to Marengo Asia Hospital in Faridabad and served summons upon Shri. Vikas Gumber and the partners of the various firms.
6. The present petitions have been preferred by the Petitioners being aggrieved by the various infractions of the GST Department during the said search and seizure.
Submissions on behalf of the Petitioners
7. According to the Petitioners, the following are the various infractions by the officials of the GST Department, who conducted the various search operations:
| (i) | That the panchnama about the search at the residential premises is not properly recorded, and certain facts are not mentioned in the same. For example, the seizure of the CCTV footage from the residential premises of the Petitioners has not been properly mentioned. |
| (ii) | That the seizure of the CCTV footage from the residence, severely violates the right to privacy of the Petitioners, as the residence from which the CCTV footage was seized, has various family members of the Gumber family residing therein. |
| (iii) | That various payments were made on behalf of the Petitioners by one of the sons of the Gumber family, under coercion and duress. |
| (iv) | That the refund applications, filed by the Petitioners, were made to be withdrawn under coercion and duress by the officials of the GST Department. |
8. In view of the above infractions and illegalities, which are alleged against the GST Department, the reliefs sought by the Petitioners are, inter alia, as under:
| (i) | To not use the CCTV footage from the residence, which has been seized by way of a hard disk of the cameras, and the memory cards seized by the officials of the GST Department. |
| (ii) | For de-sealing of the business premises at M/s Genesis Enterprises business premises, at 28, West Guru Angad Nagar Extension, Ground Floor, Gali No.13, Delhi-110092, so that the Petitioners can resume normal business operations. |
| (iii) | For reversing the Input Tax Credit (hereinafter ‘ITC’) which was available in the electronic ledger of the firms, and the individuals of the family to refund the amounts which were paid by Mr. Vikas Gumber, under coercion and duress. |
9. The submission of Mr. Gupta, ld. Counsel for the Petitioner is that, the chronology of events which led to payments being made, and withdrawal of refund applications shows that enormous pressure was put on the Petitioners’ family members, especially when there was a family function in the Gumber family, on 2nd August 2025.
10. It is further submitted that the business premises of M/s Genesis Enterprises at 28, West Guru Angad Nagar Extension, Ground Floor, Gali No.13, Delhi-110092, was entered into unauthorisedly, stating that the tenant, residing at the first floor of the said premises, provided the keys, whereas the tenant did not have any keys, and thus the locks were broken open in an unlawful manner.
11. It is further argued that the email which was received from the GST Department on 18th August 2025 itself shows that various amounts were being demanded post-search, which was conducted in an unlawful manner, without following the due process of law. In addition, a sequence of certain Whatsapp chats has also been placed before the Court, to show that from one Mobile No.: 9389493693, Mr. Abhishek Gumber was being forced to reverse the full refund amount.
12. The submission of ld. Counsel for the Petitioner is that, the officials of the GST Department have transgressed the authority conferred under Section 67 of the Central Goods and Services Tax Act, 2017 (hereinafter ‘the Act’), as also Section 103 of the Bhartiya Nagarik Suraksha Sanhita, 2023 (hereinafter ‘BNSS, 2023). In addition, the assertion is that the seizing of the CCTV footage from the residence constitutes severe violation of the right to privacy of the Petitioner’s family members.
13. According to ld. Counsel, the action taken by the officials of the GST Department is violative of various judicial decisions as also instructions issued by the Central Board of Indirect Taxes and Customs (hereinafter ‘CBIC’). In this regard, reliance is placed upon CBIC instruction no. 1 of 2022-2023 dated 25th May, 2022, and the following judgments:
| • | Bhumi Associate v. UOI 429/84 GST 634/46 GSTL 36 (Gujarat) |
| • | Vallabh Textiles v. Senior Intelligence Officer 596/[2023] 95 GST 751/70 GSTL 3 (Delhi)/(2022) 1Centax 241 (Del.) |
Submissions on behalf of the GST Department
14. Mr. Khatri, ld. SSC, on behalf of the GST department, has handed over several notes to submit that, in terms of Section 67 of the Act, which provides for the power of inspection, search and seizure, the proper officer had ‘reasons to believe’ that there was large scale wrong-doing indulged in by the Gumber family.
15. According to ld. SSC, on behalf of the GST Department, it is submitted that there were several firms of the Gumber family which were not conducting any business. The family members, and others related to the Gumber family were involved in incorporating fictitious firms, and passing on Input Tax Credit. The investigation of the premises was conducted in accordance with law. Additionally, pursuant to Section 67(2) of the Act, proper ‘reasons to believe’ have been recorded at the level of Joint Commissioner to conduct the investigation.
16. Further, it is submitted that during the investigation, and on the basis of the data which has been retrieved, various firms at different levels have been found which are fictitious and are incorporated/ created, and are run by persons connected with the Gumber Family. A chart of such firms at different Levels (hereinafter ‘Chart’) and the allegations against them as per the GST department, is set out below:
During the course of investigation, the names of following suppliers have come to fore in respect of the exporter firms and their analysis is as detailed below:
| Sl No. | Name & address of supplier | Analysis report | |||||||||||||||
| LEVEL 1: | |||||||||||||||||
| 1 | Vyom Enterprises (07AAYFV9330Q1ZX) SHOP NO-3 PROP NO- 8/1, GEETA COLONY, Delhi, 110031 Partner: Piyush Singh Rahul Sharma Parvez Malik |
| |||||||||||||||
| 2 | Blue Yard Enterprises (07ABBFB3943P1Z5) GROUND FLOOR, PP-3-A, SHOP NO 1, LAXMI NAGAR, LEFT SIDE, Delhi, 110092 Partner: Rahul Sharma Pawan Kumar |
| |||||||||||||||
| 3 | Luv Enterprises (07ILHPS5538F1ZM) First Floor, B-91, Gali No-3 KH No-299, Gokalpuri, Delhi, 110094 Proprietor: Manish Sharma |
| |||||||||||||||
| 4 | Sky Enterprises (07AFFFS9430L2ZH) FIRST, x/110, OLD NO 250/2, PARTAP GALI, Gandhi Nagar, Delhi, 110031 Partner: Parvez Malik Arvind Kumar Singh |
| |||||||||||||||
| 5 | Felicia Export (07AAJFF5886E1Z4) PROPERTY NO 1, BLOCK 5, GALI NO 4, Geeta Colony, New Delhi, East Delhi, Delhi, 110031 Partner: Rahul Sharma Piyush Singh |
| |||||||||||||||
| 6 | Swaraj Traders (07AFDFS2985L1ZE) G/F, U-160, SHOP NO-2, SHAKARPUR, Upadhyay Block, Delhi, 110092 Partner: Ashish Shukla Rahul Sharma |
| |||||||||||||||
| 7 | Unique Creation (07FEEPS9040N1ZR) GROUND FLOOR, B-576-577, UNIQUE CREATION, G.D. COLONY MAYUR VIHAR PHASE III, Delhi, 110096 Proprietor: Rahul Sharma |
| |||||||||||||||
| 8 | Sai Exim (07AEFPN1340B1Z4) House No 24, Street No 12, Block B, Kaushik Enclave Burari, North Delhi, Delhi, 110084 Proprietor: Kamal Singh Negi |
| |||||||||||||||
| 9 | Zeanath Enterprises (07AADFZ5507G1Z4) H NO. 5/4/1, Geeta colony, Near 7 Block GuruDwara, Geeta Colony, New Delhi, East Delhi, Delhi, 110031 Partner: Saurabh Gihar Parvez Malik |
| |||||||||||||||
| 10 | Fortune Traders (07AAJFF3953G1ZC) B-994, Gharoli Dairy Colony, Mayur Vihar, New Delhi, East Delhi, Delhi, 110096 Partner: Parvez Malik Arvind Kumar Singh |
| |||||||||||||||
| 11 | SKY ENTERPRISES (07AFFFS9430L1Z) first floor, x/110, old no 250/2, partap gali, Gandhi Nagar, New Delhi, North East Delhi, Delhi, 110031 |
| |||||||||||||||
| LEVEL 2: | |||||||||||||||||
| 1 | Premium Touch Enterprises (07ABFFP9997F1Z) GROUND, 667/11, DAYANAND MARG, Mandawali, Delhi, 110092 Partner: Arvind Kumar Singh Bhagya Narayan Yadav |
| |||||||||||||||
| 2 | MILENIUM ENTERPRISES (07ACCFM5021F1ZN) Ground Floor, 1174, GD COLONY, Mayur Vihar Phase 3, New Delhi, East Delhi, Delhi, 110096 Partner: PIYUSH SINGH Manish Saini |
| |||||||||||||||
| 3 | ZAPP ENTERPRISES (07AADFZ5988P1Z0) M-113, JAGATRAM PARK, Lakshmi Nagar, New Delhi, East Delhi, Delhi, 110092 Partner: Bhagya Narayan Yadav BASANT PASWAN |
| |||||||||||||||
| 4 | PSB Traders (07BAHPR5969R1ZH) B-3/3, Yamuna Vihar, THIRD FLOOR GARHIMENDU, Delhi, 110053 Proprietor: ABHISHEK KUMAR RAGHAV |
| |||||||||||||||
| 5 | Bouston Enterprises (07ABCFB6071D1ZS) B-994, GHAROLI DAIRY COLONY, Mayur Vihar Phase 3, Delhi, 110096 |
| |||||||||||||||
| 6 | Quality Traders (07AABFQ1998E1Z4) second floor, x/110 old no 250/2, Partap gali, Lakshmi Nagar, New Delhi, North East Delhi, Delhi, 110031 Partner: Arvind Kumar Singh Manish Saini |
| |||||||||||||||
| 7 | Experts Trading (07AAKFE9945Q1ZF) 5/4/1, GEETA COLONY, Gandhi Nagar, Delhi, 110031 Partner: Saurabh Gihar Rahul Sharma |
| |||||||||||||||
| 8 | KD Enterprises (07NFHPK8546G1ZU) GROUND FLOOR, B-994, GHAROLI DAIRY COLONY, Mayur Vihar Phase 3, Delhi, 110096 Proprietor: Kuldeep |
| |||||||||||||||
| 9 | AROZEN ENTERPRISES (07ACCFA8543Q1ZV) GROUND, 5/17, BLOCK NO 5, Geeta Colony Road, Gali Number 9, Geeta Colony, New Delhi, East Delhi, Delhi, 110031 Partner: Kishore Kumar Rawat Arvind Kumar Singh |
| |||||||||||||||
| 10 | Centurian Enterprises (07AATFC0055A1ZU) FIRST, X-110/1, Tagore Gali, Ram Nagar, Gandhi Nagar, New Delhi, East Delhi, Delhi, 110031 Partner: Kishore Kumar Rawat Arvind Kumar Singh |
| |||||||||||||||
| LEVEL-3 | |||||||||||||||||
| 1 | Centurian Enterprises (07AATFC0055A1ZU) FIRST, X-110/1, Tagore Gali, Ram Nagar, Gandhi Nagar, New Delhi, East Delhi, Delhi, 110031 Partner: Kishore Kumar Rawat Arvind Kumar Singh | Already disucussed in LEVEL-2 | |||||||||||||||
| 2 | KD Enterprises (07NFHPK8546G1ZU) GROUND FLOOR, B-994, GHAROLI DAIRY COLONY, Mayur Vihar Phase 3, Delhi, 110096 Proprietor: Kuldeep | Already disucussed in LEVEL-2 | |||||||||||||||
| 3 | TIMOR ENTERPRISES (07AAVFT5103A1ZC) G/F, M-121, JAGAT RAM PARK, LAXMI NAGAR, New Delhi, East Delhi, Delhi, 110092 Partner: BHA GYANARA YAN YADAB BASANT PASWAN |
| |||||||||||||||
| LEVEL-4 | |||||||||||||||||
| TIMOR ENTERPRISES (07AAVFT5103A1ZC) | Already discussed in LEVEL-3 above | ||||||||||||||||
17. According to Mr. Khatri, ld. SCC on behalf of the GST Department, the above mentioned details, of the maze of firms, which have been created, has been revealed during the course of investigation, and the investigation ought to be permitted to go on, without any hindrance.
18. Ld. SSC, on behalf of the GST Department further argues that, insofar as violation of privacy is concerned, there is no apprehension, since the hard drive of the CCTV and the memory cards which are set out in the panchnama drawn at the resident premises, at A-122,Sector 105,Noida,Uttar Pradesh-201301 (hereinafter ‘first panchnama’) have not been opened by the GST Department, and the same would not be opened without following the proper Standard Operating Procedure (‘ SOP’).
19. It is submitted that the tenant in the business premises of M/s Genesis Enterprises, at Ground Floor, 28, Guru Angad Nagar, Laxmi Nagar Flyover, Delhi -110092 had a bunch of keys, as recorded in the panchnama drawn at the premises of M/s Genesis Enterprises, (hereinafter ‘second panchnama’), and she provided access to the said premises.
20. It is further submitted that, the Petitioners and the related firms have obtained more than Rs.4 crores in ITC, and it is found that further refund applications were filed to the tune of Rs.5 crores, all of which were filed through fake ITC, without any actual supply of goods and services. It is, therefore, submitted that the entire investigation is underway, and there is no violation of privacy, as is being alleged by the Petitioner.
Analysis and Findings
21. Heard the ld. Counsels for the parties. The present case is one where the Petitioners are in effect seeking the intervention of this Court at the stage of investigation itself. Various allegations were initially raised against the officials of the GST Department. However, Mr. Gupta ld. Counsel, has fairly submitted that there is no allegation that the search was unauthorised. Section 67 of the Act, which reads as under:
“67. Power of inspection, search and seizure.—
(1)Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that–
| (a) | a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or |
| (b) | any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act, |
he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place.
(2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of State tax to things:
Provided that where it is not practicable to seize any such goods, the proper officer, or any officer authorised by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous
permission of such officer:
Provided further that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act.
(3) The documents, books or things referred to in subsection (2) or any other documents, books or things produced by a taxable person or any other person, which have not been relied upon for the issue of notice under this Act or the rules made thereunder, shall be returned to such person within a period not exceeding thirty days of the issue of the said notice.
(4) The officer authorised under sub-section (2) shall have the power to seal or break open the door of any premises or to break open any almirah, electronic devices, box, receptacle in which any goods, accounts, registers or documents of the person are suspected to be concealed, where access to such premises, almirah, electronic devices, box or receptacle is denied.
(5) The person from whose custody any documents are seized under subsection (2) shall be entitled to make copies thereof or take extracts therefrom in the presence of an authorised officer at such place and time as such officer may indicate in this behalf except where making such copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect the investigation.
(6) The goods so seized under sub-section (2) shall be released, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be.
(7) Where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized:
Provided that the period of six months may, on sufficient cause being shown, be extended by the proper officer for a further period not exceeding six months.
(8) The Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (2), be disposed of by the proper officer in such manner as may be prescribed.
(9) Where any goods, being goods specified under subsection (8), have been seized by a proper officer, or any officer authorised by him under subsection (2), he shall prepare an inventory of such goods in such manner as may be prescribed.
(10) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure, shall, so far as may be, apply to search and seizure under this section subject to the modification that sub-section (5) of Section 165 of the said Code shall have effect as if for the word “Magistrate”, wherever it occurs, the word “Commissioner” were substituted.
(11) Where the proper officer has reasons to believe that any person has evaded or is attempting to evade the payment of any tax, he may, for reasons to be recorded in writing, seize the accounts, registers or documents of such person produced before him and shall grant a receipt for the same, and shall retain the same for so long as may be necessary in connection with any proceedings under this Act or the rules made thereunder for prosecution.
(12) The Commissioner or an officer authorised by him may cause purchase of any goods or services or both by any person authorised by him from the business premises of any taxable person, to check the issue of tax invoices or bills of supply by such taxable person, and on return of goods so purchased by such officer, such taxable person or any person in charge of the business premises shall refund the amount so paid towards the goods after cancelling any tax invoice or bill of supply issued earlier.”
22. In terms of Section 67 of the Act, if the authorities suspect wrong-doing such as suppression of transactions, wrongfully claimed input tax credit in excess of entitlement, or has indulged in contravention of the provisions of the Act in order to evade tax, or has failed to declare either the premises where goods are kept or illegally transported goods likely to cause evasion of tax, the officers of the GST Department are permitted to inspect, search as also seize.
23. However, a pre-condition for such inspection, search or seizure would be that a senior officer, not below the rank of Joint Commissioner, ought to have ‘reasons to believe’ that circumstances which necessitates either inspection, search or seizure, exists.
24. In addition, the ‘reasons to believe’ also need to exist before any confiscation of goods, or documents, or books, or things is made. The ‘reasons to believe’ have to disclose that, such seized items are useful or are relevant for the proceedings under the Act. Even superdari seizure is also permitted.
25. Such documents or things which are not relied upon, have to be returned pursuant to Section 67(2) of the Act, to the person from whom the seizure is made.
26. As a part of this process, the officer who is authorized, would also have power to seize, or break open the locks, or any storage receptacles for accessing the accounts, registers or documents, if there is a suspicion of concealment, and if the access is denied.
27. The scheme of Section 67 of the Act entitles the person searched or from whose custody the documents are seized to make copies of all the documents which are seized, and under Section 67(6), provisional release of the seized goods, upon terms and conditions, is also permitted.
28. In terms of Section 67(7) of the Act, if seizure is effected under Section 67(2) of the Act, and no SCN is issued within a period of 6 months of the seizure of goods (extendable by a further 6 months on sufficient cause), the seized goods are liable to be returned to the person concerned. Moreover, proper inventory has to be made of the seized goods.
29. It is pertinent to note that the safeguards and conditions under the Code of Criminal Procedure, 1973 (hereinafter ‘Cr.P.C., 1973’) (now BNSS, 2023) which apply to search and seizure would also apply. If the proper Officer has ‘reasons to believe’ that there is evasion or, an attempt to evade, reasons shall be recorded for retaining the seized goods or other things including documents, and a receipt of the same shall also be executed.
30. Under Section 67(12) of the Act, a trap purchase can also be made by the Commissioner or any officer authorized by him.
31. The above provisions have been interpreted in various decisions which are discussed below:
31.1In R.J. Trading Co. v. Commissioner of CGST, Delhi North 344/88 GST 474/55 GSTL 277 (Delhi)/2021 SCC OnLine Del 3757, a Coordinate Bench of this Court had observed that the basic jurisdictional facts ought to exist before the power under Section 67 of the Act is exercised. The observations in the said judgment are as under:
“9.3. What is crystal clear upon a perusal of the provisions of sub-sections (1) and (2) of section 67 is that the expression “reasons to believe” controls the exercise of powers under the said provisions. Therefore, unless the basic jurisdictional facts exist, in a case, the power conferred under sub- sections (1) and (2) of section 67 cannot be exercised.
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13. The officers concerned should bear in mind that the search and seizure power conferred upon them, is an intrusive power, which needs to be wielded with utmost care and caution. The Legislature has, therefore, consciously ring-fenced this power by inserting the controlling provision, i. e., “reasons to believe”. “
31.2 In Santosh Kumar Gupta v. UOI 194/102 GST 164/82 GSTL 39 (Delhi)/2023 SCC OnLine Del 7693, the Division Bench of this Court upon finding that as per the information of the GST Department, the entity from whom the goods were purchased was non-existent, held that there is no ground to declare the search as illegal or vitiated. The observations in the said judgment are as under:
“10. The principal question to be addressed is whether, in the aforesaid facts, the inspection carried out by the respondent authorities is illegal for want of reasons to believe that the conditions as set out in section 67(1)(a) of the CGST Act are satisfied.
11. In Calcutta Discount Co. Ltd. v. Income-tax Officer, Companies District I, Calcutta [(1961) 41 ITR 191 (SC); (1961) 2 SCR 241.], the Constitution Bench of the Supreme Court had, in the context of section 34 of the Income-tax Act, 1922 observed as under (pages 210-211 in 41 ITR):
“37. The expression reason to believe’ postulates belief and the existence of reasons for that belief. The belief must be held in good faith : it cannot be merely a pretence. The expression does not mean a purely subjective satisfaction of the Income-tax Officer : the forum of decision as to the existence of reasons and the belief is not in the mind of the Income-tax Officer. If it be asserted that the Incometax Officer had reason to believe that income had been under-assessed by reason of failure to disclose fully and truly the facts material for assessment, the existence of the belief and the reasons for the belief, but not the sufficiency of the reasons, will be justiciable. The expression therefore predicates that the Income-tax Officer holds the belief induced by the existence of reasons for holding such belief. It contemplates existence of reasons on which the belief is founded, and not merely a belief in the existence of reasons inducing the belief; in other words, the Income-tax officer must on information at his disposal believe that income has been under-assessed by reason of failure to fully and truly to disclose all material facts necessary for assessment. Such a belief, be it said, may not be based on mere suspicion : it must be founded upon information.”
12. The interpretation of the expression “reasons to believe ” in Calcutta Discount Co. Ltd. v. Incometax Officer, Companies District I Calcutta [(1961) 41ITR 191 (SC); (1961) 2 SCR 241.] is instructive in interpreting the said expression as used in section 67 of the CGST Act as well.
13. The sufficiency of the reasons is not amenable to judicial review. So long as there is material or information, which supplies a rational basis for forming a belief that the conditions as stipulated under section 67(1) of the CGST Act are satisfied, the search or inspection authorized under the said section cannot be faulted.
14. In Income-tax Officer, I Ward, Distt. VI, Calcutta v. Lakhmani Mewal Das [(1976) 103 ITR 437 (SC); AIR 1976 SC 1753.], the Supreme Court had, in the context of Section 147 of the Income-tax Act, 1961, observed (page 448 in 103 ITR):
“8. the reasons for formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax officer and the formation of his belief that there has been escapement of income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. ”
15. In the present case, the information that the petitioner had purchased the goods from a supplier, which was found to be non-existent at his principal place of business, has a direct link in forming the belief that the petitioner wrongfully availed of the ITC.
16. In view of the above, we find no ground to declare any search or inspection conducted on November 12, 2022 as illegal or vitiated on the ground that there was no reason to believe that the petitioner had wrongfully availed the ITC.”
31.3 In Deepak Khandelwal v. Commissioner of CGST 443/99 GST 560/77 GSTL 5 (Delhi)/2023 SCC OnLine Del 4985, the entire scheme of Section 67 of the Act has been discussed and it has been observed as under:
“40. It is clear from the schematic reading of Section 67 as well as other provisions of the Act that the purpose of Section 67 of the Act is not recovery of tax; it is not a machinery provision for enforcing a liability. The purpose of Section 67 of the Act is to empower authorities to unearth tax evasion and ensure that taxable supplies are brought to tax. In respect of goods and supplies, which are subjectmatter of evasion, the proper officer has the power to seize the goods to ensure that taxes are paid. Once the department is secured in this regard either by discharge of such liability or by such security or bond as the authority concerned deems fit the goods are required to be released in terms of sub-section (6) of Section 67 of the Act.
41. The second limb of Section 67(2) of the Act permits seizure of documents or books or things so as to aid in the proceedings that may be instituted under the Act. The documents or books or things cannot be confiscated and have to be returned. This is amply clear from the plain language of the second proviso to sub-section (2) of Section 67 of the Act. In terms of the second proviso to sub-section (2) of Section 67, the documents or books or things seized are required to be retained only for so long as it may be necessary “for their examination and for any inquiry or proceedings under the Act”. Once the said purpose is served, the books or documents or things seized under sub-section (2) cannot be restrained and are required to be released.
42. The second proviso, although couched as a proviso, is an integral part of sub-section (2) of Section 67 of the Act. The same clearly reflects that the legislative intent of empowering seizure of documents or books or things is for enabling their use in aid of the proceedings under the Act. Thus, seizure of such documents or books or things is conditional upon the proper officer’s opinion. That the same are “useful for or relevant to” such proceedings.”
31.4 It is pertinent to note that this judgement has not been interfered with, by the Supreme Court. In Commissioner of CGST v. Deepak Khandelwal 715/105 GST 934/89 GSTL 193 (SC)/SLP 31886/2024vide order dated 14th August, 2024, the SLP was dismissed in the following terms:
“Delay condoned.
No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India.
The special leave petitions are, accordingly, dismissed.
Pending application(s), if any, shall stand disposed of.”
31.5 Recently, in ITC Ltd. v. State of Karnataka [Civil Appeal No. 11798 of 2025, dated 12-9-2025], the Supreme Court was dealing with inspection, search, and seizure conducted under Section 15 of the Legal Metrology Act, 2009 (hereinafter ‘Legal Metrology Act’) read with Legal Metrology (Packaged Commodities) Rules, 2011. In the said case, the premises of the Petitioner was inspected and certain stationery items such as books, notebooks, pencils, etc. were seized by the GST Department. The argument was that under Section 15 of the Legal Metrology Act, ‘reasons to believe’ was a condition precedent for conducting inspection, search, and seizure. In the context of the Legal Metrology Act, the Supreme Court held as under:
“19.5. It is also pertinent to mention here that various special enactments, such as the Legal Metrology Act, 2009, the Income Tax Act, 1961, the Customs Act, 1962, the Central Excise Act, 1944, the Finance Act, 1994, the Goods and Service Tax Act, 2017, the Narcotic Drugs and Psychotropic Substances Act, 1985, as well as several repealed indirect Tax Laws of different States, contain provisions relating to search and seizure. The above list is illustrative and not exhaustive, as there are many other enactments with similar provisions. In all such enactments, the object of search and seizure is, more often than not, to collect evidence relating to an ongoing investigation of an offence or violation, and in some cases, to prevent a violation. Further, in all these enactments, the procedure prescribed under the Cr.P.C, insofar as it is applicable to search and seizure, is to be followed.
It is also settled law that unless the provisions of the Cr.P.C. are explicitly excluded, the same shall apply to special enactments as well. [See: Ashok Munilal Jain and another v. the Assistant Director, Directorate of Enforcement, and Radhika Agarwal v. Union of India (supra)]. Therefore, the ratio laid down by this Court in the various judgments could not have been ignored by the Division Bench of the High Court.
xxx
20.1. Observance of due process of law and the principles of natural justice being intertwined, is a legal necessity to ensure that the action of the authorities does not result in manifest arbitrariness or abuse and misuse of power by those empowered to conduct inspection, search, and/or seizure. When the law prescribes a particular procedure to be followed while taking action, the same must be strictly adhered to”
32. Applying the above-mentioned legal precedents, and in the context of the stipulations contained in Section 67 of the Act, the Court has to consider the factual conspectus of the present case. The clear submission on behalf of the GST Department is that the ‘reasons to believe’ are recorded in the original file of the GST Department by the proper officer. As per the note handed over by Mr. Khatri, ld. SCC, the various steps taken by the GST Department are as under:
| (i) | Reasons to believe: Based on intelligence received by Commissioner, CGST Delhi East, vide email dated 21st July 2025, it was revealed that five firms, controlled by the Gumber family, had filed refund claims in the Laxmi Nagar Division, which appeared prima facie improper and consisting of a supply chain of suppliers, appearing to be created to pass on fake ITC. Subsequently, a discreet verification was conducted at the principal place of business of these firms, and it was revealed that there was no business activity, and these firms were merely created for availing fraudulent ITC. Further, enquiries suggested that relevant goods, documents and electronic evidence may be secreted at the residential premises of the Gumber family in Delhi and Noida. Preliminary data analysis also revealed that suppliers to these firms were non-genuine, and had transactions only with entities linked to the Gumber family. In these circumstances, there existed sufficient reasons to believe that search under Section 67(2) of the Act was warranted. |
| (ii) | Seized devices have not been accessed: During the search at the residential premises, memory cards of CCTV cameras, and other electronic devices were seized. However, the GST Department has not yet accessed the seized devices, and the same would be opened only in the presence of the Petitioner. |
| (iii) | Manner in which the sealing of Business Premises of M/S Genesis Enterprises was carried out: The business premises of M/S Genesis Enterprises i.e., at ground Floor, 28, Guru Angad Nagar, Laxmi Nagar, Delhi-110092 was searched under Section 67(2) of the Act, and the search was conducted in the presence of two independent witnesses and the tenant, Smt. Kamlesh, who provided the bunch of keys. The seized goods were handed over to her under proper INS-02 and INS-03 dated 22nd July 2025. On receipt of the petitioner’s request for desealing, the same was duly acknowledged, and they were given the opportunity to join the de-sealing process. They were also offered the option of provisional release of the seized goods under Section 67(6) of the Act read with Rule 140 of the CGST Rules, 2017. |
| (4) | Coercion for filing DRC-03 and Withdrawal of Refund Application: No communication was made with the investigating officers by the Petitioner, when the refund application was withdrawn by the Petitioner. The withdrawal of refund applications, post inspection, shows that the parties were aware of the penalty, and other actions for fraudulent refunds and hence they chose to withdraw it immediately. ITC reversal was made before any of the parties joined the investigation. It is stated that, on 1st August, 2025, Mr. Abhishek Gumber appeared and voluntarily offered, and expressed to make the payments. At this stage, it is pertinent to note that, even the department was not insisting on complete reversal and repayment. |
33. The note that has been handed over by Mr. Khatri, ld. SCC for the GST Department shows that a maze of entities has been created by the Gumber family, which necessitated the inspection, search and seizure. Prima facie, in the background of the facts captured in the note, as also the chart extracted above, of the different entities, it cannot be held that the proceedings conducted under Section 67 of the Act were violative, or contrary to law. In fact, to unearth the alleged evasion, surprise inspection, search, and seizure was rightly resorted to by the GST Department.
34. The Court has, at this stage, perused some of the documents which have been placed on record, including the two panchnamas. The first panchnama reveals that there were various digital devices which were seized in the presence of Mrs. Bharti Gumber, wife of Mr. Vikas Gumber. The details of the two memory cards which have the CCTV footage are as under:
| 8 | 32 GB Memory Card | Sandisk Ultra | 2424DX EXYOP C |
| 9 | 32 GB Memory Card | Sandisk Ultra | 3446DY GSHOE6 |
35. It is pertinent to note that the GST Department has categorically asserted that the said two memory cards have not been accessed by the GST Department.
36. At this stage, ld. Counsel for the Petitioner submits that even the hard disk is of the CCTV footage from the residence.
37. Insofar as the second panchnama, which relates to the business premises of M/s Genesis Enterprises is concerned, the same reads as under:
“Thereafter, we the Panchas alongwith the officers reached the premises 28, West Guru Angad Nagar Extension, Gali No. 13, Delhi-110092, around 02:10 PM. The main door of the building was found closed, then the officers in front of us, the panchas, rang the bell. Thereafter, a lady came from the first floor and introduced herself as Smt Kamlesh w/o Pawan Kumar Rastogi, tenant, residing at first floor of the building and told that the ground floor is in possession with Smt Bharti Gumber, Vikas Gumber and their family. Then the officer, in front of us, the panchas, asked her to call them and open the door. Thereafter, Smt Kamlesh opened the door. Then, the visiting officers introduced themselves by showing their respective identity cards and also showed her the Search Authorization dated 22.07.2025 and explained their purpose of visit at the said premises. Then, the officers along with us, the panchas, entered the premises. Then, the visiting officers offered their personal search to Smit Kamlesh which was politely declined by her. Thereafter, after asking the details and contact number of the owner of the ground floor, Smt Kamlesh provided the number of Smt Bharti Gumber (9999371053), Sh Abhishek Gumber 9999982807). Then the officer, in front of us, the panchas, called Sh Abhishek over provided mobile number but the number was temporarily out of service arca. Then, the officers, contacted over the provided mobile number of Smt Bharti Gumber. Then, she told over call that Sh Abhishek Gumber and Sh Vikas Gumber manages the building located at 28, West Guru Angad Nagar Extension, Delhi-110092 and provided the number of Sh Vikas Gumber (9999802694). Thereafter, the officers contacted Sh Vikas Gumber on the number provided by Smit Bharti Gumber. Thereafter, Sh Abhishek attended the call and told that the property is in their possession and he is at hospital in faridabad with his father and unable to come at the premises to join the search proceedings. On asking about the keys of the premises, Smt Kamlesh told that there is a bunch of keys available with her handed over by Sh Abhishek and provided the bunch of keys to the officers to open the door. Thereafter, officers, in front of us, the panchas, opened the gate of the ground floor. After entering the gate of the ground floor, it was found that the premises consist of a hall of approx 50 sq yards, a room of approx 20*10 feet, a washroom of approx. 3*10 feet. Then, the officers along with us, the panchas, searched the premises in presence of Smt Kamlesh.”
38. A perusal of the second panchnama shows that the officials of the GST Department were given access into the premises by the tenant residing on first floor i.e, Smt. Kamlesh, who had handed over the keys to the officials of the GST Department. The Court is not convinced that the access to the business premises was unlawfully obtained, as is clear from the second panchnama, wherein the tenant who had a bunch of keys, had provided access to the officials of the GST department. It appears that the Gumber family was aware of the fact that the officials wanted to search the said premises and they were given access by the Tenant.
39. However, some of the concerns which are raised by the Petitioners such as right to privacy of the family being violated, etc., deserve to be addressed. Clearly, any family related CCTV footage which is with the GST department and violates privacy of family members cannot be used or disseminated in any manner. In order to address concerns relating to privacy some directions are issued below.
40. Broadly, on the issues which are raised by the Petitioner the following directions are issued:
| (1) | Manner in which the CCTV footage is to be copied |
| (i) | Insofar as the CCTV footage of the residence is concerned, the hard disk, or any memory cards, which contain the CCTV footage of the residential premises, would not be accessed by the officials of the GST Department, except, in the presence of at least one member of the Gumber family, and one authorised representative. |
| (ii) | After viewing the footage in their presence, if there is any relevant data that is required by the GST Department, only to that extent, the same would be copied. All the remaining footage would be returned to the Petitioners. |
| (2) | Search of M/s Genesis Enterprises |
| (i) | Insofar as the search of M/s Genesis Enterprises is concerned, usually, the officials of the GST Department ought to ensure that the person who is being investigated, gives access to the premises that are to be searched. Taking access through a tenant who may be having keys of the premises, may not be permissible, unless it is with the knowledge of the person/entity being searched. |
| (ii) | If the GST officials are of the opinion that the person being investigated is not providing access to the premises, then, after following the due process, in terms of Section 67(4) of the Act, after recording the requisite ‘reasons to believe’, the locks can be broken open, as per law. |
| (3) | Communications with persons under investigation |
The Court has also perused the Email, and Whatsapp chats sequence, which have been placed on record.
| (i) | Email Communication: All communications by the officials of the GST department, with the person/s or entities being investigated ought to be in the official prescribed mode. Whenever emails are sent, the name, and designation of the official ought to be mentioned, so that it can be properly traced back to the person who has sent the email. |
| (ii) | Whatsapp Communication: Insofar as the Whatsapp communication is concerned, the same would not be usually permissible, unless there is an exceptional circumstance, or an emergency. Engaging in such Whatsapp communication, may, in fact, make the officials of the GST Department subject to various allegations, which ought to be avoided. |
| (4) | Allegations related to payments under coercion and duress |
| (i) | Insofar as the allegations related to payments having been made under coercion and duress are concerned, this Court is of the opinion that on the overall fact situation which has emerged, the allegations of coercion or duress would need deeper examination in appropriate proceedings, as there are different versions by the Petitioners, as also by the officials of the GST Department. |
| (ii) | The person, Mr. Abhishek Gumber, who is stated to have made the said deposits, is fully aware of the consequences of such actions. He has also engaged in continuous communication on Whatsapp with the official of the GST Department, which ought to have been avoided. (iii) Be that as it may, insofar as the payments that have been made, and the refund applications which are alleged to have been withdrawn are concerned, the same would be subject to outcome of the Show Cause Notice proceedings. If in the Show Cause Notice proceedings, the Petitioners succeed, the refund applications would then be permitted to be revived by the Petitioners. |
41. Insofar as any other remedies which the Petitioner wish to avail of are concerned, the same are left open.
42. No further relief is being pressed in these writ petitions.
43. Needless to add that the GST Department is free to investigate any of the other Levels 1, 2, 3 and 4 firms as well, or any other individuals/entities and proceed in accordance with law.
44. None of the observations made in this order would have any binding effect on any other proceedings, as also the adjudication proceedings, as this Court has not examined the factual aspects of the allegations made considering the scope of exercise of writ jurisdiction.
45. The writ petitions along with the pending applications are disposed of in the above terms.