The Hon’ble Delhi High Court in the case of Gunjan Bindal and Anr. vs. Commissioner of CGST, Delhi West and Ors. [W.P. (C) 8713 of 2023 dated November 17, 2023] disposed of the writ petition and directed the Revenue Department to remit the amount of cash seized along with interest thereby holding that, the Revenue Department has no power to seize cash under Section 67 of the Central Goods and Services Tax Act, 2017 (CGST Act).
The Revenue Department (“the Respondent”) searched the residential premises of Gunjan Bindal and Anr. (Petitioners) under Section 67 of the CGST Act. The panchnama drawn by the Respondent indicate that the total cash amounting to Rs.1,15,00,000/- along with the other articles were found in the bedroom of the Petitioners. The panchnama further record that the Petitioner was unable to provide any satisfactory explanation or any documentary evidence to support the source of the cash. Therefore, the officers seized the cash based on the presumption that the cash had resulted from unlawful activity or sale proceeds of goods without proper accounting. Thereafter, the Petitioner repeatedly requested the Respondent to release the amount but the cash has not been released by the Respondent.
Aggrieved, the Petitioner filed a writ petition, inter alia, praying for release of the aggregate amount, on the ground that, the Respondent does not have the power to seize cash under Section 67 of the CGST Act.
Whether the Revenue Department has the power to seize cash under Section 67 of the CGST Act?
The Hon’ble Delhi High Court in the case of W.P.(C) 8713/2023 held as under:
Section 67 of the CGST Act:
“Power of inspection, search and seizure
(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 authorized 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 by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act.”
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioners have filed the present petition, inter alia, praying that respondents be directed to release an aggregate amount of ₹1,15,00,000/- resumed/seized by respondent no.2.
2. The petitioners are brothers residing in separate floors of a building bearing the address 71, Engineers Enclave, Pitampura, Saraswati Vihar, New Delhi-110034. On 18.01.2020, a search was conducted at the residential premises of the petitioners under Section 67 of the Central Goods and Services Tax Act, 2017 (hereafter ‘the CGST Act’). The panchnama drawn by respondents indicates that amongst other articles, cash amounting to ₹14,50,000/- (Rupees Fourteen Lacs Fifty Thousand only) was found in the bedroom of petitioner no.1 located on the second floor of the premises, and cash amounting to ₹1,00,50,000/- (Rupees One Crore Fifty Thousand only) was found from the bedroom of petitioner no.2 located on the fourth floor. The panchnama further records that since the petitioners were unable to provide any satisfactory explanation or any documentary evidence to support the source of the cash, the officers resumed the cash on the belief that it had resulted from unlawful activity or was sale proceeds of goods without proper accounting.
3. Thereafter, the petitioners repeatedly requested the respondents for release of the said amount but the said cash has not been released.
4. The petitioners contend that the concerned officers had no power to seize cash under Section 67 of the CGST Act on the ground that the same was not satisfactorily explained. Concededly, the issue is covered by the earlier decisions of this Court in Deepak Khandelwal Proprietor M/s Shri Shyam Metal v. Commissioner of CGST, Delhi West & Anr.: 2023: DHC: 5823-DB and Rajeev Chhatwal v. Commissioner of Goods and Services Tax (East): 2023: DHC: 6060-DB.
5. Accordingly, the present petition is required to be allowed and the respondents are liable to refund the money seized.
6. The respondents state that the amounts so seized has been kept in a fixed deposit bearing interest.
7. Respondent no.2 is, accordingly, directed to remit the amount of ₹14,50,000/- along with accrued interest to the bank account of petitioner no.1, and remit ₹1,00,50,000/- along with accrued interest to the bank account of petitioner no.2.
8. The details of the bank accounts shall be provided by the petitioners to respondent no.2 within a period of one week from today. The respondents are directed to remit the amounts to the said bank accounts, as aforesaid, within a period of two weeks thereafter.
9. It is clarified that this would not preclude the Income Tax Department or any other authority from taking necessary steps in regard to the petitioners possessing such cash. Respondents are also not precluded from taking such steps under the relevant statute in accordance with law.
Author can be reached at email@example.com)