Facts of the Case

Fiore Enterprises (OPC) Private Limited, an exporter entity controlled by members of the Gumber family, filed a writ petition as part of a batch of connected matters led by Genesis Enterprises, challenging inspection, search and seizure operations conducted by the CGST Department in July 2025. Searches were carried out at the residential premises of the Gumber family at Noida and at multiple business premises in Delhi connected with Fiore Enterprises and other related firms.

The petitioner alleged that the search and seizure were conducted in an unlawful manner, that CCTV footage from the shared residential premises was seized in violation of the right to privacy, that refund applications were made to be withdrawn and Input Tax Credit was reversed under coercion and duress, and that the GST authorities exceeded their statutory powers under Section 67 of the CGST Act.

The GST Department asserted that intelligence inputs and discreet verification revealed that Fiore Enterprises was part of a larger network of interconnected and fictitious firms created and controlled by the Gumber family for availing and passing on fraudulent Input Tax Credit and claiming inadmissible GST refunds without actual supply of goods.

Issues Involved

Whether the search and seizure conducted under Section 67 of the CGST Act were without jurisdiction or violative of statutory safeguards, whether seizure of CCTV footage from residential premises violated the right to privacy, whether allegations of coercion in ITC reversal and withdrawal of refund applications warranted writ interference, and whether the High Court should interdict GST investigation at a nascent stage.

Petitioner’s Arguments

The petitioner contended that the panchnamas were defective, that seizure of CCTV footage from a shared residential premises infringed the privacy rights of family members, and that coercive methods were adopted by GST officials to compel reversal of ITC and withdrawal of refund claims. It was argued that the actions of the GST Department were contrary to CBIC instructions and judicial precedents governing search and seizure under Section 67 of the CGST Act.

Respondent’s Arguments

The GST Department submitted that proper “reasons to believe” were duly recorded by a competent officer prior to authorisation of search under Section 67(2) of the CGST Act. It was contended that investigation revealed that Fiore Enterprises had received supplies from non-genuine and non-operational supplier firms forming part of a layered structure of bogus entities created to pass on fake ITC. The Department further assured the Court that seized CCTV memory cards and electronic devices had not been accessed and would be examined strictly in accordance with prescribed SOPs and legal safeguards.

Court Order / Findings

The Delhi High Court examined the statutory framework and safeguards under Section 67 of the CGST Act and reiterated that search and seizure powers, though intrusive, are legally permissible where “reasons to believe” exist. The Court found that substantial material had been placed on record showing large-scale GST evasion through a maze of fictitious firms created and controlled by the Gumber family, including entities connected with Fiore Enterprises.

The Court held that sufficiency of reasons recorded for authorising search cannot be examined in writ jurisdiction and that judicial interference at the investigation stage would be wholly unwarranted. Allegations of coercion, duress and privacy violation were held to involve disputed questions of fact not amenable to adjudication under Article 226, particularly in view of the Department’s categorical assurance that seized CCTV footage had not been accessed.

Important Clarification

The High Court clarified that Section 67 CGST Act empowers GST authorities to conduct inspection, search and seizure to unearth tax evasion and that courts will not interfere with investigations merely on allegations of procedural impropriety unless clear jurisdictional error or mala fides are established. Issues relating to alleged coercion, ITC reversal or refund withdrawal may be agitated in appropriate proceedings after completion of investigation.

Final Outcome

The writ petition filed by Fiore Enterprises (OPC) Private Limited was dismissed. The Delhi High Court declined to interfere with the search and seizure proceedings conducted under Section 67 of the CGST Act and permitted the GST Department to proceed with the investigation in accordance with law. All pending applications, if any, were disposed of accordingly.

Source Link- https://delhihighcourt.nic.in/app/showFileJudgment/PMS15092025CW138212025_155439.pdf


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