Seizure orders cannot survive once assessment quashed on limitation prohibition set aside { Goal Closures vs. State Tax Officer (Int)-1 [2026] 184 taxmann.com 226 (Madras)}
Facts
- The assessee was subjected to search and seizure proceedings by the GST department.
- During the search, certain goods were seized and placed under Prohibition and Seizure Orders.
- Subsequently, the department issued a show cause notice and passed an assessment order.
- The assessee challenged the assessment order before the High Court.
Issue
- Whether the Prohibition and Seizure Orders can continue when the assessment proceedings themselves are quashed on the ground of limitation, especially when there was no proposal for confiscation of goods.
Held
- The High Court held that once the assessment order is quashed on limitation, the very basis for continuing seizure or prohibition orders ceases to exist.
- Since the department did not initiate confiscation proceedings, the continuation of seizure/prohibition was unsustainable in law.
- Therefore, the Prohibition and Seizure Orders were set aside.
