The Delhi High Court has held that GST authorities can retain the seized goods for a maximum period of four and a half years.
The Petitioner, Dhruv Krishan Maggufiled the petition to get back his laptop, computer, documents and other things seized by the Respondents / Directorate General of GST Intelligence (DGGI) in a search conducted on 28th August 2019.
The DGGI got a communication from the Chief Manager, Allahabad Bank, JawalaHeri Market, PaschimssVihar informing the DGGI Headquarters of certain high-level transactions related to the refund of GST credited to four bank accounts. The said accounts were newly opened and the refund amount was withdrawn immediately by the bank account holders.
The bank accounts of M/s Monal Enterprises, Aircon Overseas, Micra Overseas, and Ganeshi Inc., were frozen. The total amount credited to the bank accounts of the said companies was found to be to the tune of Rs.10,32,21,718/-S.
The counter affidavit claims that in the process of unearthing these transactions the search and seizure were conducted at B-773, Sushant Lok-1, Gurugram, Haryana in which computer, laptops, documents and other documents were seized on 28th August 2019, the release of which is sought for in this petition.
It was observed that Section 67(2) read with Section 67(3), Section 74(2) and Section 74(10) would show that the period as prescribed in these provisions has not yet lapsed and in view thereof, the Respondents would proceed in accordance with the law.
It was further contended by the department that it was able to unearth a scam involving GST refunds and the Petitioner and his family were found to be complicit in the same.
A conjoint reading of Section 74(2) and Section 74(10) would clearly show that the maximum period for issuance of the show-cause notice is six months prior to five years from the date of the erroneous refund. As per Section 67(3), if the documents, books or things are not being relied upon for the issuance of notice under the CGST Act, 2017, the same is supposed to be returned within a period not exceeding thirty days from the issue of the said notice.
Justice Prathiba M Singh observed that the period had not lapsed. The Court didn’t find it appropriate to directly release the computer, laptop, documents and other things seized vide punchnama dated 28th August 2019. The Writ petition was dismissed
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