The Gauhati High Court has produced a thorough and important analysis of the limits of the sealing power under Section 67(4) of the GST Acts, holding that a tax authority's use of that provision to keep a tax consultant's office sealed for more than four months after the completion of search and seizure operations is illegal, unauthorised and contrary to the mandate of the statute. The ruling, by Justice Devashis Baruah in WP(C)/3035/2026 (Surendra Sharma v. State of Assam, 10.08.2026), delivers a six-point framework for what Section 67(4) permits — and, as importantly, what it does not.
The facts are striking. On 01.04.2026, State GST intelligence officers searched the office of Surendra Sharma (a tax consultant providing services to over 200 clients) at Bokajan, Assam. During the search, 105 items were seized and described in the seizure memo. What happened next was procedurally anomalous: the custody of the seized books, documents and things was handed back to the petitioner himself under the direction not to remove them without permission. Simultaneously, an Order of Prohibition was issued covering office equipment — laptops, desktops, 426 files, a printer, air conditioners, refrigerator, inverter and batteries — none of which were goods liable to confiscation. And the office was physically sealed. The petitioner was arrested on 02.04.2026, granted bail on 08.04.2026, and then found himself unable to resume practice because his office remained sealed. Representations went unanswered for over four months. He approached the High Court.
The court's analysis proceeds through the statutory text of Section 67 with careful attention to the internal logic of its sub-sections. Sub-section (2) is the core power: search and seizure of goods liable to confiscation, or books, documents and things useful to proceedings. The custody of seized books, documents and things must remain with the proper officer until they are needed for examination or proceedings — not handed back to the searched person. Handing back custody immediately after seizure, as occurred here, was itself a sign that the authorities considered them no longer necessary. Sub-section (4) — the sealing power — is an enabling provision exercisable in furtherance of the search power under sub-section (2). Its trigger is explicit and narrow: access to the premises must be denied. Where no such denial occurs, sub-section (4) has no application. The affidavit filed by the Respondents contained no assertion that access had been denied — the petitioner had, by all accounts, cooperated fully during the search.
On the Order of Prohibition, the court held it was invalid on its face: the first proviso to Section 67(2) enables a prohibition order only in respect of goods liable to confiscation under Section 130. Laptops, desktops, printers, air conditioners, refrigerators and batteries in a consultant's office are not goods liable to confiscation under Section 130, and the prohibition order covering them was therefore without statutory authority.
The broader principle the court articulates is that Section 67(4)'s sealing power arises during and for the purpose of the search, and ceases once the search is complete. It cannot be used as a warehouse tool — to physically secure a sealed space so that seized items remain on the premises under an administrative seal. That is not what the provision authorises. The directions: de-seal forthwith (not later than 12.08.2026); take fresh custody of the 105 seized items if still necessary (with a fresh seizure memo relating back to the original); return copies of documents to the petitioner unless the Respondents form the view that doing so would prejudice the investigation; and set aside the Order of Prohibition as without statutory basis. The court was at pains to note that the investigation continues, and its ruling does not protect the petitioner from future action — it simply restores the legal boundaries of Section 67(4).
-2026-juristway.com-2179-HC(Gauhati)-GST | Gauhati High Court | 10.08.2026