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TMI Blog2024 (2) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... release of cash that was seized from the premises of the petitioner. The Court held that the word thing in Section 67 (2) would include money - Even otherwise, in the facts of this case what is evident is that cash was seized/resumed vide Panchnama dated 04.10.2021 and in accordance with sub section (7) of Section 67 thereof, when no notice in respect thereof is given within six months of seizure of the goods, the goods shall be returned to the person from whose possession they were seized. On this ground also, petitioners are entitled for the return of resumed cash. Undisputedly, petitioners had not handed over the cash to the concerned Officers voluntarily. The action taken by the Officers was therefore a coercive action. CGST Act does not support such an action of forcibly taking over the possession of the currency from the premises of any person. There are no justification for the resumption of the cash and its continued retention by the respondents. Petitions are therefore allowed with directions to the respondents to forthwith remit the proceeds of the fixed deposit (along with interest) to the bank account of the entities/person from whose possession the same was res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ian Currency totalling to Rs. 1,90,66,000/- from the said premises vide Panchnama dated 04.10.2021. 5. Petitioner sent an e-mail dated 05.12.2021 to the Senior Intelligence Officer, DGGI, stating that cash found during the search at Mukesh Kapoor s residence, belongs to Mukesh Kapoor, K.M. Foods Infrastructure Pvt. Ltd. Apparent Marketing Pvt. Ltd., as per following details:- S. No Particulars Cash in Hand 1) K M Foods Infrastructure Pvt. Ltd. 29,51,257/- 2) Apparent Marketing Pvt. Ltd. 85,41,191/- 3) Mukesh Kapoor 68,63,552/- 4) Saroj Kapoor 7,10,000/- Total 1,90,66,000/- 6. The Officers of the respondents on 01.12.2023, returned the documents and mobile phones seized during the search conducted on 04.10.2021. However, the currency seized was not returned to the petitioners. 7. Respondent No. 1 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein, the Hon ble High Court interpreted the word things appearing in Section 67 (2) of the CGST Act, 2017 to include the money. ANALYSIS CONCLUSION 13. Having considered the submissions of the learned counsels for the respective parties, at the outset, it would be appropriate to reproduce the provisions of Section 67 (2) of the CGST Act, which reads as under:- SECTION 67 OF CGST ACT 2017 67. Power of inspection, search and seizure. (1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that (a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or (b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts may, in the opinion of the proper officer, prejudicially affect the investigation. (6) The goods so seized under sub-section (2) shall be released, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be. (7) Where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: Provided that the period of six months may, on sufficient cause being shown, be extended by the proper officer for a further period not exceeding six months. (8) The Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (2), be disposed of by the proper officer in such mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spection under sub section (1) of Section 67 of the Act is conferred to unearth any evasion of tax or any attempt to evade tax and this provision is not meant for recovery of tax or for securing the same. 15. Sub Section (2) of Section 67 of the Act specifies the power to seize the goods. If the proper Officer has reasons to believe that any goods which are liable for confiscation or any documents or books or things which in his opinion would be useful and relevant for any proceedings under the Act are secreted at any place, he may either search and seize the said goods, documents or books or things. The Second Proviso to sub Section (2) of 67 of the Act clarifies that insofar as the seized documents or goods or things are concerned, the same shall be retained only so long as it is necessary for their examination and for any inquiry or proceedings under the Act. 16. Sub Section (7) of Section 67 of the Act specifies that where the goods are seized under sub Section (2) of Section 67 of the Act and no notice, in respect thereof is given within the period of six months of the seizure of the goods, the goods are required to be returned to the person from whom the same were seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the stock in trade of the appellant's business. It is evident from the order of the Intelligence Officer that the cash that was seized from the premises of the appellants was not the stock in trade of the quarry business that was conducted by the appellant. The findings of the Intelligence Officer that 'it is suspicious that this much amount of money kept in the house of M/s. Shabu as idle and not deposited at bank' and further 'the amount received as gift on the day of marriage has not been recorded in his income tax return and from this it is evident that the money is from illicit sources' reveal the extent to which authorities under the Act are misinformed of their powers and the limits of their jurisdiction. The aforesaid findings of the Intelligence Officer could perhaps have been justified had he been an officer attached to the Income Tax department. In the context of the GST Act, the findings are wholly irrelevant. We find that the seizure of cash from the premises of the appellants was wholly uncalled for and unwarranted. 22. The aforesaid decision of the Kerala High Court received the stamp and approval of the Hon ble Supreme Court, inasmuc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a drastic power; it is invasive of the rights of a taxpayer and his private space. Conferring of unguided or unbridled power of this nature would fall foul of the constitutional guarantees. It necessarily follows that such power must be read as circumscribed by the guidelines that qualify the exercise of such power, and the intended purpose for which it has been granted. As stated above, it is contextually clear that exercise of such power is restricted only in cases where in the opinion of the proper officer, seizure is useful for or relevant to any proceedings under the Act. The second proviso of Subsection (2) and Sub-section (3) of Section 67 of the Act makes it amply clear that the purpose of seizure is for the purpose of relying on the same in proceedings under the Act. 24. We are in respectful agreement with the view taken by the Co- ordinate Bench that the word things appearing in Section 67 of the CGST Act, 2017 does not include money , and therefore, that being so, action on the part of the Officers of the respondents seizing/resuming the cash was illegal and arbitrary. 25. Investigation has revealed that there is no evidence that the cash so seized was repr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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