Revenue Department has no power to seize cash under Section 67 of the CGST Act

[CA Bimal Jain]

The Hon’ble Delhi High Court in the case of GUNJAN BINDAL AND ANR. VERSUS COMMISSIONER OF CGST, DELHI WEST AND ORS. - 2023 (11) TMI 954 - DELHI HIGH COURT disposed of the writ petition and directed the Revenue Department to remit the amount of cash seized along with interest thereby holding that, the Revenue Department has no power to seize cash under Section 67 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”).

Facts:

The Revenue Department (“the Respondent”) searched the residential premises of Gunjan Bindal and Anr. (“the Petitioners”) under Section 67 of the CGST Act. The panchnama drawn by the Respondent indicate that the total cash amounting to Rs.1,15,00,000/- along with the other articles were found in the bedroom of the Petitioners. The panchnama further record that the Petitioner was unable to provide any satisfactory explanation or any documentary evidence to support the source of the cash. Therefore, the officers seized the cash based on the presumption that the cash had resulted from unlawful activity or sale proceeds of goods without proper accounting. Thereafter, the Petitioner repeatedly requested the Respondent to release the amount but the cash has not been released by the Respondent.

Aggrieved, the Petitioner filed a writ petition, inter alia, praying for release of the aggregate amount, on the ground that, the Respondent does not have the power to seize cash under Section 67 of the CGST Act.

Issue:

Whether the Revenue Department has the power to seize cash under Section 67 of the CGST Act?

Held:

The Hon’ble Delhi High Court in the case of GUNJAN BINDAL AND ANR. VERSUS COMMISSIONER OF CGST, DELHI WEST AND ORS. - 2023 (11) TMI 954 - DELHI HIGH COURT held as under:

• Opined that, the aforementioned issue is already covered by the earlier decisions of the Court in the case of Deepak Khandelwal, Proprietor, DEEPAK KHANDELWAL PROPRIETOR M/S. SHRI SHYAM METAL VERSUS COMMISSIONER OF CGST, DELHI WEST & ANR. - 2023 (8) TMI 929 - DELHI HIGH COURT , and RAJEEV CHHATWAL VERSUS COMMISSIONER OF GOODS AND SERVICES TAX (EAST) - 2023 (8) TMI 1263 - DELHI HIGH COURT , wherein it was held that the Revenue Department does not have the power to seize cash under Section 67 of the CGST Act.
• Held that, the petition is disposed and the Respondent is empowered to take any other steps or measure available in accordance with law.
• Directed that, the Respondent is directed to remit the amount seized to the Petitioner bank account within two days from the date of order along with accrued interest.

Relevant Provision:

Section 67 of the CGST Act:

“Power of inspection, search and seizure

(1) ……………………

(2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things:

Provided that where it is not practicable to seize any such goods, the proper officer, or any officer authorized by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer:

Provided further that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act.”

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