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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 ..... le interest to the petitioner, which process be completed with due expedition. Conclusion - Currency is not goods under the Act and cannot be seized under Section 67. The seizure of cash or any other valuables is outside the ambit of Section 2 (52) of the Act and such exercise of powers conferred under Section 67 of the Act, is not sustainable in law. Petition allowed. - HON'BLE MR. JUSTICE YASHWANT VARMA AND HON'BLE MR. JUSTICE DHARMESH SHARMA For the Petitioner Through: Mrs. Anjali Jha Manish, Mr. Priyadarshi Manish Mr. Aman Ahluwalia, Advs. For the Respondents Through: Mr. Vedansh Anand, Adv. for R-1. Mr. Atul Tripathi, SSC for CBIC. DHARMESH SHARMA, J. (ORAL) 1. The petitioner is invoking the extra ordinary writ jurisdiction of this Court under Article 226 of the Constitution of India, 1950, seeking an appropriate writ, order or directions, thereby seeking quashing of the seizure order INS-02 dated 15 February 2021, qua the seizure of Indian currency amounting to Rs. 23,50,000/- from the residential premises of the petitioner in Delhi as illegal, and also seeking directions against the respondents to forthwith release the aforesaid sum along with applicable interest. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd limb of Section 67(2) of the Act permits seizure of documents or books or things so as to aid in the proceedings that may be instituted under the Act. The documents or books or things cannot be confiscated and have to be returned. This is amply clear from the plain language of the second proviso to sub-section (2) of Section 67 of the Act. In terms of the second proviso to sub-section (2) of Section 67, the documents or books or things seized are required to be retained only for so long as it may be necessary for their examination and for any inquiry or proceedings under the Act . Once the said purpose is served, the books or documents or things seized under sub-section (2) cannot be restrained and are required to be released. 42. The second proviso, although couched as a proviso, is an integral part of sub-section (2) of Section 67 of the Act. The same clearly reflects that the legislative intent of empowering seizure of documents or books or things is for enabling their use in aid of the proceedings under the Act. Thus, seizure of such documents or books or things is conditional upon the proper officer's opinion. That the same are useful for or relevant to such proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd books . It denotes items that contain information or records, which the proper officer has reason to believe is useful for or relevant to the proceedings under the Act. The context in which the word things is used makes it amply clear that, notwithstanding, the wide definition of the term things , the same is required to be read ejusdem generis with the preceding words. It is apparent that the legislative intent in using a word of wide import is to include all possible articles that would provide relevant information, records, and material which may be useful for or relevant to proceedings under the Act. 47. We are unable to accept that the word things must be read expansively to include any and everything notwithstanding that the same may not yield and/or provide any material useful or relevant to any proceedings under the Act as contended on behalf of the Revenue. It is necessary to bear in mind that power of search and seizure is 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 circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hakor, who seldom concedes anything, did not concede that proposition. He says that the act of the accused amounted to setting up a stall. No doubt you may have a stall on wheels, but I am clearly of opinion that introducing into a street a lorry on wheels with goods for sale upon it does not amount to setting up a stall within Section 152 (1) (a). In my opinion that sub-section deals with making some form of addition or annexe, more or less permanent, to a building in the street. It is directed against the man who has a shop or house in the street, and who encroaches upon the street by making some sort of addition to his house or shop. I think the real question is whether the case can be brought within Section 152 (1) (b). In my opinion the words or any other thing must be read ejusdem generis as the words box, bale, package or merchandise . Those words seem to cover merchandise, and things in which merchandise can be packed, and any other thing must be of the same kind or genus and does not include a vehicle. In my view a motor car or a motor lorry or a horse drawn or hand-propelled vehicle, though containing merchandise and left standing in a street, cannot be said to come withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to safeguard the interests of the Revenue. Section 67 of the Act must be read schematically along with other provisions of the Act. 55. The Revenue has averred in its counter-affidavit that cash and silver bars in question were seized because the petitioner could not produce any lawful evidence of its purchase/possession and they appeared to be sale proceeds from the goodless/fake invoices being transacted by the petitioner . The search and seizure operations under Section 67 of the Act are not for the purpose of seizing unaccounted income or assets or ensuring that the same are taxed. The said field is covered by the Income Tax Act, 1961. Thus, even if it is assumed that the petitioner could not produce any evidence of purchase of the silver bars or account for the cash found in his possession, the same were not liable to be seized under sub-section (2) of Section 67 of the Act. The power of the proper officer to seize books or documents or things does not extend to seizing valuable assets for the reasons that they are unaccounted for or may be liable to confiscation under any other statute. Concededly, there is no material to indicate that the particular silver bars or cash were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of the petitioner. The court held that the word things as appearing in sub-section (2) of Section 67 of the Act is required to be given wide meaning as per Black's Law Dictionary. The court also referred to Wharton's Law and had noted that the word thing is defined to include money . In addition, the court had also referred to a decision of the Supreme Court referring to the Heydon's rule, and concluded that money was included in the word things . With much respect to the Court and its opinion, we are unable to persuade ourselves to adopt the said view. As noted above, the power of search and seizure are drastic powers and are not required to be construed liberally. Further, we find that the legislative intent of permitting seizure of books or documents or things in terms of sub-section (2) of Section 67 of the Act is crystal clear and it does not permit seizure of currency or valuable assets, simply, on the ground that the same represent unaccounted wealth. The mischief rule or the Heydon's rule (propounded in the year 1584 in Heydon case [Heydon case, (1584) 3 Co Rep 7 : 76 ER 637] ) requires a statute to be interpreted in the light of its purpose. The purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e thereunder with intent to evade payment of tax; or (ii) does not account for any goods on which he is liable to pay tax under this Act; or (iii) supplies any goods liable to tax under this Act without having applied for registration; or (iv) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or (v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance, then, all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty under section 122. 2) Whenever confiscation of any goods or conveyance is authorised by this Act, the officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation, such fine as the said officer thinks fit: Provided that such fine leviable shall not exceed the market value of the goods confiscated, less the tax chargeable thereon: Provided further that the aggreg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed of. ------------------------ Notes: 1. Section 2(52): - goods means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply; 2. Section 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 payable under this Act, he may authorise in writing any other officer of central tax to inspect any places of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal 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 manner as may be prescribed. (9) Where any goods, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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