Delhi HC upholds Seizure of Cash as Taxpayer voluntarily deposited balance GST, Interest and Penalty [Read Order]

The Delhi High Court upholds the Seizure of cash as the Taxpayer voluntarily deposited the balance GST, interest and penalty.

The petitioner, M/s Steelcon Pvt. Ltd. challenged the seizure of cash amounting to Rs.65 lakhs from the residential premises of the Director of the petitioner on 04.03.2021. The petitioner further challenges the letter dated 24.03.2021 issued by the respondent whereby the bank was directed to release the said amount of Rs.65 lakhs to the petitioner, however, only for payment of Government dues. The petitioner further claims that a sum of Rs.94,65,316/- deposited by it with the respondents has been erroneously recovered by the respondents from the petitioner without proper adjudication.

The petitioner submitted that the respondents carried out a search at the premises of the petitioner company. The respondents further carried out a search at the registered office premises of the petitioner company and sealed the said premises on the basis that the said address had not been disclosed in the Form GST Reg-06. Stock lying in the said premises was also seized by the respondents.

The petitioner vehemently argued that the Panchnama for the said search and seizure at the residential premises of the Director of the petitioner company was not supplied to either the petitioner or its Director. She further submits that under the Central Goods Service Tax Act, 2017 the respondent had no authority to seize cash.

The division bench of Justice Navin Chawla and Justice Manmohan held that the assessee can by making a voluntary deposit of tax, interest, and penalty avail the benefit of restriction of penalty to only 15% of such tax. In the present case, the petitioner availed of this remedy, and based thereon, proceedings against the petitioner arising out of the search and seizure activities carried out on 04.03.2021 were closed. This was also informed to the petitioner vide impugned letter dated 24.09.2021 of the respondents. The petitioner having availed of the relief, cannot now turn around and challenge the said proceedings.

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