2025 (2) TMI 724 - AAR - GST

Withdrawal of Advance Ruling application - GST Search can be conducted other than the place specified in the Search warrant or not - cash or valuables can be seized by the department from the place other than specified and authenticated in the search warrant or not - cash and goods pertaining to the person other than the assessee can be seized by the Department or not - confiscation of cash seized - HELD THAT - The applicant has not raised any questions which are found to be covered under any of the clauses of sub-section (2) of section 97 of the GST Act. It is satisfied that the applicant has been provided reasonable opportunity to counter the aforesaid observations. Therefore there are no reason to accept the instant application made by the applicant for pronouncement of ruling. The application is therefore rejected on this ground alone. In terms of first proviso of sub section (2) of section 98 of the GST Act the authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act . Here found that as the matter has already been decided by Assistant Commissioner CGST division-J Ajmer vide Order in Original No. 14/GCM/GST/DIV-I/2024-25/AC dated 11.06.2024. Therefore the application filled by the applicant is not fit to accept for pronouncement of ruling. The application is liable to be rejected hence rejected. Since the ruling authority has not found any reason to accept the application for pronouncement of ruling as above and the applicant has also requested for withdrawal of the application therefore their request to withdraw the application is considered.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment revolve around the procedural and substantive aspects of the GST search and seizure operations. The issues include:

1. Whether a GST search can be conducted at a location not specified in the search warrant.

2. The legality of seizing cash or valuables from locations not specified and authenticated in the search warrant.

3. Whether the department can seize cash and goods belonging to persons other than the assessee.

4. The classification of cash under the GST Act and whether it can be seized and confiscated as goods.

5. The imposition of penalties and demands on individuals other than the assessee.

6. Whether goods belonging to others, kept at the assessee's premises, can be deemed to belong to the assessee.

7. The clubbing and assessment of cash seized from different premises in the hands of the assessee.

8. The admissibility of affidavits and requests made by the assessee regarding the ownership of seized goods and cash.

ISSUE-WISE DETAILED ANALYSIS

1. Legality of Search and Seizure Operations:

- Relevant Legal Framework and Precedents: The GST Act provides specific guidelines under which search and seizure operations can be conducted. The applicant cited a precedent from the Delhi High Court, which held that cash does not fall within the purview of goods under section 2(75) of the CGST Act.

- Court's Interpretation and Reasoning: The Tribunal observed that the search and seizure operations must adhere strictly to the provisions of the GST Act. Any deviation, such as conducting a search at an unauthorized location, could render the operation invalid.

- Key Evidence and Findings: The applicant argued that the search was unauthorized as it was conducted at the premises of a relative, not specified in the search warrant. Additionally, the cash seized was argued to belong to third parties, not the assessee.

- Application of Law to Facts: The Tribunal noted that the applicant's arguments were not adequately supported by evidence permissible under the GST Act's provisions.

- Treatment of Competing Arguments: The applicant's reliance on the Delhi High Court's decision was acknowledged, but the Tribunal emphasized the need for adherence to the procedural aspects of the GST Act.

- Conclusions: The Tribunal found the search and seizure operations questionable due to procedural lapses but did not provide a ruling due to the withdrawal of the application.

2. Classification and Seizure of Cash:

- Relevant Legal Framework and Precedents: Section 2(75) of the CGST Act defines goods, and the applicant argued that cash should not be classified as goods.

- Court's Interpretation and Reasoning: The Tribunal acknowledged the applicant's argument but did not delve into a detailed analysis due to procedural grounds and the withdrawal request.

- Key Evidence and Findings: The applicant presented affidavits and documents claiming the cash belonged to third parties.

- Application of Law to Facts: The Tribunal did not make a determination on this issue due to the procedural posture of the case.

- Treatment of Competing Arguments: The applicant's argument was noted, but the Tribunal did not engage in a substantive evaluation.

- Conclusions: No conclusive ruling was provided on the classification of cash due to the withdrawal of the application.

3. Imposition of Penalties:

- Relevant Legal Framework and Precedents: The GST Act provides for penalties under various sections, including section 122 for specific offenses.

- Court's Interpretation and Reasoning: The Tribunal did not engage in a detailed analysis of the penalties due to the procedural grounds on which the application was rejected.

- Key Evidence and Findings: The applicant argued that penalties were wrongly imposed on the assessee for goods and cash belonging to third parties.

- Application of Law to Facts: The Tribunal did not provide a ruling on the penalties due to the withdrawal of the application.

- Treatment of Competing Arguments: The applicant's arguments were noted, but no substantive evaluation was conducted.

- Conclusions: No ruling on the penalties was provided due to the procedural posture and withdrawal of the application.

SIGNIFICANT HOLDINGS

- Verbatim Quotes of Crucial Legal Reasoning: The Tribunal stated, "We do not find any reason to accept the instant application made by the applicant for pronouncement of ruling. The application is, therefore, rejected on this ground alone."

- Core Principles Established: The Tribunal emphasized adherence to procedural requirements under the GST Act and noted the inadmissibility of applications where issues are already adjudicated.

- Final Determinations on Each Issue: The application was rejected on procedural grounds, and no substantive rulings were provided on the issues raised due to the withdrawal of the application.