Cash not a Stock In Trade, Not Subject to Seizer under CGST: Kerala HC directs to Release Seized Cash [Read Order]

The Kerala High Court has held that cash is not a stock in trade and not subject to seizer under Central Goods and Service Tax (CGST) Act and directed to release seized cash.

Dhanya Sreekumari, the petitioner is running an industrial unit that is involved in the manufacture and sale of Idly/Dosa batter, Parotta (half-cooked), Chappathi, etc. It is stated that the Unit has been functioning from the year 2010 onwards, and the 1st petitioner was awarded the Best Woman Entrepreneur Award 2016 by the Government of Kerala. 

The 1st petitioner is marketing her products through the 2nd petitioner.  An Investigating Team represented by the 1st respondent conducted an inspection of the Manufacturing Unit as well as the residence of the 1st petitioner and found that 32,73,900/- kept as cash and seized the same as per the order of seizure dated 13.06.2022, a copy of which has been produced as Ext.P1. 

Along with cash, pay-in slips for depositing an amount totalling Rs.21,02,000/- were also seized by the respondents.  According to the petitioner, pay-in-slip for depositing a further sum of Rs.8,00,000/- was also present in the Safe from which a sum of Rs.11,71,900/- was seized, but the same had not been noted in the order of seizure.

 The petitioner argued that the respondents are not entitled to seize cash by invoking the power available under Section 67 of the Central Goods and Service Tax (CGST) Act.  The petitioner filed a representation before the 4th respondent for the return of the seized cash as early.  The petitioner filed the writ petition and sought direction to the return of the cash.

Smt Thushara James, Senior Government Pleader for the respondents argued that there is tax evasion and contended that the word 'things' in Section 67(2) will include cash also, and hence the seizure of cash was very much in accordance with the law.

The Division Bench held that “the cash being not a stock-in-trade of the petitioners, was not a thing that ought to have been seized.  The seizure was one year back, and there is no reason to retain it any further.” 

Justice T R Ravi directed the respondents to release the cash seized from the petitioner within a week from the date of receipt of a copy of the judgment.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates