The Gauhati High Court has ruled that GST authorities cannot keep a business premises sealed indefinitely after completing a search, particularly where the occupant has not denied access to the officers. In a significant judgment concerning the powers of GST authorities during search and seizure proceedings, the Court directed the Assam GST Department to de-seal the office of a tax consultant whose premises had remained sealed for more than four months.
The judgment was delivered by Justice Devashis Baruah in Sri Surendra Sharma v. The State of Assam and Others, WP(C)/3035/2026.
GST Search at Tax Consultant’s Office
The case arose after GST authorities conducted a search at the office of Sri Surendra Sharma, who operates a tax consultancy under the name Sharma and Associates at Bokajan, Assam. The search was conducted on 1 April 2026 pursuant to an authorisation issued under the GST law.
During the search, the authorities seized various documents, books, electronic devices and other articles. A prohibition order in FORM GST INS-03 was also issued covering items including two desktop computers, six laptops, 426 files, a printer, an inverter, batteries, air conditioners and a refrigerator.
Sharma contended that these articles were essential for running his tax consultancy and were not goods in which he was dealing or trading. He further submitted that the GST authorities had sealed his entire office and taken away the keys, effectively preventing him from carrying on his professional activities.
According to Sharma, the sealing caused substantial hardship because he was handling the tax and compliance affairs of more than 200 clients.
Department Alleged Fake ITC Transactions
The GST Department opposed the petition and alleged that Sharma was involved in facilitating the passing of fake Input Tax Credit through fraudulent invoices. The Department claimed that the alleged tax evasion was in excess of ₹6.68 crore and argued that the premises needed to remain sealed until the investigation was completed.
The High Court, however, examined whether the statutory power to seal the premises could continue after the search and seizure proceedings had concluded.
GST Officers Cannot Indefinitely Seal Premises
The Court found no material demonstrating that Sharma had denied the GST officers access to his office during the search. The Bench held that the power to seal premises is linked to the search process and cannot be exercised merely as a means of retaining control over the premises after the search has been completed.
The Court also observed that the items mentioned in the prohibition order, such as laptops, desktops, files, refrigerators, air conditioners, inverters and batteries, could not, in the facts of the case, be regarded as goods liable to confiscation.
Accordingly, the Court held that the action of the authorities in seizing the articles, handing over custody of the seized documents and things to the petitioner after the search, and nevertheless keeping the office premises sealed could not be sustained in law.
Gauhati High Court Directs De-Sealing
The High Court therefore quashed the prohibition order dated 1 April 2026 and directed the Assam GST authorities to de-seal Sharma’s office and restore possession to him by 12 August 2026.
Importantly, the Court clarified that its decision did not prevent the GST Department from taking custody of documents or other items again if they were genuinely required for the investigation. However, any such action would have to comply with the law, including issuance of a fresh seizure order where necessary.
The Court also directed the authorities to consider providing copies of the seized documents to Sharma, unless doing so could adversely affect the ongoing investigation.
Key Takeaway for GST Practitioners
The ruling reinforces an important principle concerning GST search and seizure powers. While GST authorities possess significant statutory powers to search premises and seize relevant material, those powers must be exercised within the limits prescribed by law.
The judgment makes it clear that the power to seal business premises cannot be converted into an indefinite measure simply because a GST investigation remains pending. Once the search process is completed, continued sealing of the premises requires proper legal justification.
For businesses, tax consultants and professionals facing GST search proceedings, the decision highlights the importance of distinguishing between the lawful seizure or retention of relevant evidence and the continued sealing of an entire workplace.
Case: Sri Surendra Sharma v. The State of Assam & Ors.
Case No.: WP(C)/3035/2026
Court: Gauhati High Court
Date: 10 August 2026
Petitioner’s Counsel: R.S. Mishra, Advocate
Respondent’s Counsel: B. Choudhury, Standing Counsel