Order Date – 06 June 2023

Parties: RHC Global Exports Private Limited Vs Union of India

Facts – 

• The Petitioner, RHC Global Exports Private Limited, is a well- established SEZ Unit in SURSEZ, which is located for Gem and Jewelry activity and it was contended by the petitioner that unit of the petitioner is to be treated as foreign territory for its business operations and as such they are ‘Tax Neutral’ or ‘Revenue Neutral’ entity with respect to levy and collection of custom duties, GST and other indirect taxes.
• A search and seizure operation were started by the respondent against the petitioner and same is carried out without arriving at any satisfaction as required under Section 67(1) of GST Act. Business Premises and residential premises of petitioner were sealed.

Issue – 

• Whether the respondents are authorized to conduct search and seizure procedures in SEZ units?

Order – 

• The Tribunal observed that a close perusal of provisions of Section 6 indicates that respondent authorities are empowered to carry out proceedings in SEZ. Their jurisdiction is unquestionable as Central Government has already authorized those officers by virtue of notification dated 5.8.2016. Sub-section (2) of Section 6 of GGST Act. Further, by virtue of circular dated 5.7.2017, functions of proper officers under CGST Act are also defined.
• Hence, once Central Government has notified the functions of proper officers, said functions shall also be applicable to be carried out by the officers under CGST Act and hence it cannot be said that there was any lack of authority on the part of respondents.
• Provision contained under Section 7 of IGST Act, determines inter-State supply and sub-section (5) indicates that supply of goods or services of both, to or by a SEZ unit shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce and therefore, petitioner appears to be under mistaken belief that once business of petitioner is carried out through and within SEZ, they are outside the purview of authority of respondents and hence these SEZ units are not exempted from any investigation or inspection.
• Thus respondent authorities are acting not beyond their authorities and facts are such in which this is not a fit case in which to exercise extraordinary jurisdiction, which is equitable in nature, and as such, petition being merit less, deserves to be dismissed.