Any asset found during search proceedings cannot be taken by revenue authorities without seizing the same
In a recent landmark judgment, the Delhi High Court addressed a crucial legal issue involving the search proceedings conducted by revenue authorities. The case of Baleshwari Devi vs. Additional Commissioner (Anti-Evasion) raised concerns about the illegal dispossessions of assets during such searches, specifically focusing on the removal of a substantial cash amount without proper seizure. This detailed analysis explores the court’s findings, the contentions presented by the respondent authorities, and the subsequent judgment that not only declared the action as illegal but also directed the authorities to refund the seized amount. The case sheds light on the significance of adhering to statutory provisions and ensuring fairness in revenue-related procedures.
Simple Summary
1. On 09.11.2021, a search was conducted, in the residential premises of the petitioner at the time of which she was not present at her residence.
2. The respondent authorities seized some files, loose papers and cheque leaves during the course of the search. It is recorded that the room occupied by the petitioner was locked and the petitioner’s daughter-in-law, Smt. Seema Gupta, had informed the respondents that she did not have the keys to that room. During the search proceedings, the duplicate keys were made and the door of the room was opened in the presence of Smt. Seema Gupta.
3. The respondents found a sum of Rs. 19,50,000/- in cash in that room and took possession of the same without its seizure. The said cash was then handed over by Respondent No. 2 to respondent No. 3 and thereafter was placed in a fixed deposit for a term of twelve months with Canara Bank.
4. Being aggrieved, the petitioner filed the present Writ Petition before the Court impugning the action of the respondents in removing a sum of 19,50,000/- from her premises without its seizure and prayed the Court to issue directions to the respondent to refund the said amount.
Contentions of the Respondent
1. The respondent submitted that no proceedings for returning the amount were undertaken as none had approached the concerned respondents for seeking return of the said amount.
2. The respondent contended that Seema Gupta had made a statement during the search proceedings that she did not have any documents to justify the legal possession of the cash amount. And since she was present at the premises during the search proceedings, the respondent had assumed that the cash was in her possession.
Judgement
1. It is not necessary to examine the controversy in the present case because it is admitted that the respondents have not seized the cash. The seizure memo also does not record the seizure of the cash.
2. The respondents have coined another term ‘resume’ – to denote taking forcible possession of the assets without recording seizure of the said assets. There is no provision under the CGST Act, which empowers the respondents to “resume” or dispossess any person of his assets, without seizing the same.
3. The respondents are required to act strictly in accordance with the provisions of the statute and the rules thereunder. The action of the respondents in dispossessing the petitioner or any of the family members of any of their assets in the proceedings under section 67 of the CGST Act, without seizing the same, is clearly illegal. The respondents cannot continue with the possession of the currency collected from the petitioner’s residence.
4. The assumption that the cash recovered from the locked room was in the possession of Seema Gupta (the petitioner’s daughter-in-law) is It was recovered from a room that was locked and the record shows that Ms Seema Gupta did not have the keys to that room.
5. In view of the above observations, the Court directs the respondents to refund the amount to the petitioner.
Conclusion: The Delhi High Court’s judgment underscores the importance of legal procedures in search proceedings. The ruling emphasizes that assets cannot be dispossessed without proper seizure, and authorities must act strictly within the provisions of the statute. The directive for the refund of the amount reflects a commitment to ensuring fairness and legality in revenue-related actions.
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very nice article