Commissioner of CGST Vs Deepak Khandelwal (Supreme Court of India)
Summary: The Supreme Court of India dismissed the Special Leave Petition (SLP) by the Commissioner of CGST in the case against Deepak Khandelwal, thereby upholding the Delhi High Court’s decision that the seizure of cash and silver bars during a search under Section 67 of the CGST Act is not sustainable. The Delhi High Court had ruled that while Section 67 allows for the seizure of goods related to tax evasion, cash does not fall under the definition of “goods” and should not be subject to seizure. The court also noted that the purpose of Section 67 is to ensure compliance with tax regulations, not to recover unaccounted wealth, which is the domain of the Income Tax Act. Furthermore, the court highlighted that the seized items must be returned if no notice is served within six months, as mandated by Section 67(7). Despite the CGST department’s contention that the silver bars and cash were unaccounted for, the courts found that the seizure was unauthorized. Consequently, the Supreme Court’s dismissal of the SLP reinforces the legal precedent that currency and similar assets cannot be seized under the CGST Act without specific cause and due process.
