Case Note & Summary
The dispute arose from a writ petition filed by Petitioner, a proprietor registered under the GST Act, challenging two seizure orders dated 27th and 28th June 2023 issued by GST authorities that seized cash totaling INR 1 crore from her office premises and her parents' residence. The Petitioner contended that the seizure was illegal as cash does not fall within the ambit of 'goods, documents, books or things' under Section 67(2) of the Central Goods and Services Tax Act, 2017, and that the Respondents failed to comply with procedural requirements such as recording 'reasons to believe', issuing receipts, and providing timely notices. The core legal issue was whether the seizure was justified under the CGST Act. The Petitioner argued that the seizure was not mandated by law, lacked relevance to any proceedings, and was based on insufficient grounds linked to another individual's activities. The Respondents, represented by their counsel, defended the seizure actions. The High Court analyzed the provisions of Section 67(2) CGST Act, emphasizing that seizure is permissible only for items useful or relevant to proceedings and secreted at any place. The court held that cash does not qualify under this provision, and the absence of recorded 'reasons to believe' and other procedural lapses rendered the seizure unlawful. Consequently, the court allowed the petition, quashed the impugned seizure orders, and directed the release of the seized cash to the Petitioner with interest, providing relief as sought.
Headnote
A) Constitutional Law - Writ Jurisdiction - Article 226 of the Constitution of India - The Petitioner filed a writ petition under Article 226 challenging seizure orders dated 27th and 28th June 2023 issued by GST authorities seizing cash amounting to INR 1 crore from her premises and her parents' residence, seeking quashing and release of the cash with interest (Paras 2-3). B) Goods and Services Tax - Search and Seizure - Section 67(2) Central Goods and Services Tax Act, 2017 - The court examined whether cash falls within 'goods, documents, books or things' under Section 67(2) CGST Act, which authorizes seizure only of items useful or relevant to proceedings and secreted at any place, and held that cash does not qualify, making the seizure illegal (Paras 5, 7(i)-(ii)). C) Goods and Services Tax - Procedural Compliance - 'Reasons to Believe' and Seizure Requirements - Sections 67(2), 67(7), 67(11) Central Goods and Services Tax Act, 2017 - The court found the impugned seizure orders lacked recorded 'reasons to believe', did not issue a receipt under Section 67(11), and failed to give notice within six months as per Section 67(7), rendering the seizure procedurally defective and unlawful (Paras 7(v)-(vii)). D) Goods and Services Tax - Ownership and Relevance of Seized Items - Section 67(2) Central Goods and Services Tax Act, 2017 - The court noted that the Respondents failed to justify how the seized cash was useful or relevant to any proceedings against the Petitioner, and statements indicated the cash belonged to the Petitioner, not to Mr. Hitesh Chheda involved in fake ITC claims, undermining the seizure's basis (Paras 7(iii)-(iv), 7(viii)-(ix)).
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Issue of Consideration: Whether the seizure of cash of INR 1 crore by the impugned seizure orders from the premises belonging to the Petitioner is justified in law and whether the Respondents had the power to seize the same under the provisions of the CGST Act
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Final Decision
The High Court allowed the petition, quashed the impugned seizure orders dated 27th June 2023 and 28th June 2023, and directed the Respondents to release the seized cash amounting to INR 1 crore to the Petitioner with interest
