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TMI Blog2025 (1) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... the record, at the outset, we find that the facts of the present case and the legal repercussions are squarely covered by the decision rendered by the Division Bench of this Court in Deepak Khandelwal, Proprietor, M/s. Shri Shyam Metal v. Commissioner of CGST, Delhi West & Anr. 2023 SCC OnLine Del 4985 as well as decision in Rahul Tayal & Ors. vs. Additional Director Directorate General of GST Intelligence DGGI Jaipur Zonal Unit &Ors. W.P.(C) 13517/2024 dated 18.02.2024, of which one of us was a member. But first let us narrate the factual background. ANALYSIS & DECISION 3. Shorn of unnecessary details, the petitioner, who is the sole proprietor of M/s. Ashish Traders, a firm engaged in the business of trading in iron scrap operating from Delhi, was subjected to a search by the DGGI [Directorate General of Goods and Services Tax Intelligence] on 15.02.2021 in connection with an investigation into the alleged fraudulent availment of 'Input Tax Credit' by M/s. Jai Mateshwari Steels Pvt. Ltd., during which various documents, electronic devices and a cash amount of Rs. 23,50,000/- were seized. 4. Suffice it to state that, while addressing the question of whether currency could const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , consistent with the legislative intent of permitting seizure of books or documents or things, provides that if the documents or books or things seized under sub-section (2) are not relied upon for issue of a notice under the Act or rules made thereunder, the same shall be returned within a period of thirty days. Although, there is no ambiguity in the language of sub-section (2) of Section 67 of the Act that seizure of books or documents or things is permissible only if the same are considered useful for or relevant to the proceedings under the Act; sub-section (3) of Section 67 makes it amply clear that the purpose of seizure of books or documents or things is only for the purpose of reliance in the proceedings under the Act. It, thus, posits that if the documents or books or things are not relied upon in any notice that is issued, the same are liable to be returned. 44. It follows from the contextual interpretation of sub-sections (2) and (3) of Section 67 that seizure of books or documents or things are only for the purpose of relying on such material in proceedings under the Act. 45. It is also relevant to refer to sub-section (11) of Section 67 of the Act. The said sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idelines 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 sub-sections (2) and (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. 48. It is relevant to refer the decision of the Bombay High Court in Emperor v. Hasan Mamad [Emperor v. Hasan Mamad, 1940 SCC OnLine Bom 31 : AIR 1940 Bom 378]. In the said case, the accused was convicted under Section 152 of the Bombay Municipal Boroughs Act, 1925. The allegation against the accused was that he had allowed the hand-driven lorries containing fruits to remain on a public street at Ahmedabad for more than half an hour. Section 152 of the Bombay Municipal Boroughs Act, 1925 reads as under: "(1) Whoever in any area after it has become a municipal district, or borough- (a) shall have built or set up, or shall build or set up, any wall or any fence, rail, post, stal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to come within the section. The hand lorry of the accused clearly falls within the definition of vehicle contained in Section 3(21) of the Bombay Municipal Boroughs Act. The control of vehicles in streets is dealt with by the Bombay District Police Act. Whatever the powers of the police may be under that Act, I am of opinion that the learned Sessions Judge was right in the view he took that a vehicle does not fall within the mischief of Section 152." 50. The contextual interpretation of all sub-sections of Section 67 of the Act clearly indicates that the same do not contemplate seizure of valuable assets, for securing the interest of Revenue. 51. In RBI v. Peerless General Finance & Investment Co. Ltd. [RBI v. Peerless General Finance & Investment Co. Ltd., (1987) 1 SCC 424 : (1987) 61 Comp Cas 663], the Supreme Court held as under: (SCC p. 450, para 33) "33. Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular silver bars or cash were received by the petitioner in specie against any particular fake invoice. 56. There may be cases where the Revenue finds that a particular currency note or any particular asset has evidentiary value to establish the Revenue's case. Illustratively, a delinquent dealer supplies goods without invoices only on presentation of a currency note that bears a particular number. The presentation of the currency note is used as a means of authenticating the identity of the purchaser. The number of the particular currency note is recorded in diary maintained by the purchaser. The Revenue Officer ascertains this modus operandi of evasion of taxes. The currency note, correlated with the diary, would be relevant in establishing evasion of tax in respect of certain goods. Undoubtedly, in such cases, the currency note is material that yields information as to the modus adopted for evading tax; the proper officer may seize the currency note for its evidentiary value and relevance in establishing evasion of tax in proceedings under the Act. The same may be relied upon in the proceedings that may ensue. The particular currency note in such a case would yield ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpreted in the light of its purpose. The purpose of the Act is not to proceed against unaccounted wealth. The provision of Section 67 of the Act is also not to seize assets for recovering tax. Thus, applying the principle of purposive interpretation, the power under Section 67 of the Act cannot be read to extend to enable seizure of assets on the ground that the same are not accounted for. xxxx xxxx xxxx 62. Thus, even if, it is accepted, which we do not, that the proper officer could seize the currency and other valuable assets in exercise of powers under sub-section (2) of Section 67 of the Act, the same were required to be returned by virtue of sub-section (3) of Section 67 of the Act because the silver bars and currency have not been relied upon in the notice issued subsequently. 63. In view of the above, the petition is allowed. The respondents are directed to forthwith release the currency and other valuable assets seized from the petitioner during the search proceedings conducted on 28-1-2020. It is, however, clarified that the respondents are not precluded from instituting or continuing any other proceedings under the Act in accordance with law. Nothing stated in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods confiscated, less the tax chargeable thereon: Provided further that the aggregate of such fine and penalty leviable shall not be less than the amount of penalty leviable under sub-section (1) of section 129: Provided also that where any such conveyance is used for the carriage of the goods or passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine equal to the tax payable on the goods being transported thereon. (3) Where any fine in lieu of confiscation of goods or conveyance is imposed under sub-section (2), the owner of such goods or conveyance or the person referred to in sub-section (1), shall, in addition, be liable to any tax, penalty and charges payable in respect of such goods or conveyance. (4) No order for confiscation of goods or conveyance or for imposition of penalty shall be issued without giving the person an opportunity of being heard. (5) Where any goods or conveyance are confiscated under this Act, the title of such goods or conveyance shall thereupon vest in the Government. (6) The proper officer adjudging confiscation shall take and hold possession of the things confis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of tax payable under this Act, he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place. (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 authorised 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, being goods specified under sub-section (8), have been seized by a proper officer, or any officer authorised by him under sub-section (2), he shall prepare an inventory of such goods in such manner as may be prescribed. (10) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure, shall, so far as may be, apply to search and seizure under this section subject to the modification that subsection (5) of section 165 of the said Code shall have effect as if for the word "Magistrate", wherever it occurs, the word "Commissioner" were substituted. (11) Where the proper officer has reasons to believe that any person has evaded or is attempting to evade the payment of any tax, he may, for reasons to be recorded in writing, seize the accounts, registers or documents of such person produced before him and shall grant a receipt for the same, and shall retain the same for so long as may be necessary in connection with any proceedings under this Act or the rules made thereunder for prosecution. (12) The Commissioner or an officer authorised by him may cause purchase of any goods or services or both by any person authorised by him from the business ..... X X X X Extracts X X X X X X X X Extracts X X X X
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