K.M Food Infrastructure Pvt Ltd Through Its Director Mukesh Kapoor Vs Director General DGGI Headquarters (Delhi High Court)
Delhi High Court’s Groundbreaking Ruling: Cash Is Not ‘Goods’ Under GST Act
In a landmark decision, the Delhi High Court has set a precedent in the interpretation of the Goods and Services Tax (GST) Act, providing significant relief to taxpayers across the nation. The court ordered the return of cash seized illegally, ruling that money does not fall under the definition of ‘goods’ as per the GST Act. This judgment, stemming from the cases of K.M Food Infrastructure Pvt Ltd and others against the Director General DGGI Headquarters, marks a pivotal moment in GST law enforcement and taxpayer rights.
Background of the Case
The heart of the matter dates back to October 4, 2021, when GST officers conducted a search operation at the premises of Mr. Mukesh Kapoor, Director of K.M. Food Infrastructure Pvt. Ltd., and Apparent Marketing Pvt. Ltd. During the search, a substantial amount of cash totaling Rs. 1,90,66,000 was seized. The petitioners argued that this seizure was illegal, arbitrary, and contrary to the legal provisions, requesting the court to order the return of the seized currency.
Petitioners’ Standpoint
The petitioners contended that the seized cash was duly accounted for in their books of accounts. They challenged the CGST officers’ power to seize cash under Section 67 (2) of the CGST Act, stating that the act’s provisions for seizing goods liable for confiscation do not extend to cash, as it does not fall within the ‘goods’ definition.
Respondents’ Argument
On the other side, the respondents justified the seizure on the grounds that the petitioners could not satisfactorily explain the cash’s source. They believed the money was the result of clandestine and illegal activities, invoking prior judgments to support their actions.
