GST Officers cannot Take Possession of Cash found during Search: Delhi HC [Read Order]

A Division Bench of the Delhi High Court recently directed to return the amount taken in possession by GST Officers with interest, noting that the GST Officers cannot take possession of cash found during search, under Goods and Services Tax Act, 2017

During the course of the search, at the residence of the petitioners, the officers found cash aggregating to ₹1,22,87,000/- and took possession of the said cash.

Admittedly, no seizure memo was drawn in respect of the said cash. However, a panchnama was drawn up, which indicates that the concerned officers took possession of certain items including cash aggregating to ₹18.87 Lakhs and cash amounting to ₹1.04 Crores. The said officers also took possession of mobile phones as well as laptops.

The petitioner has challenged the said search operation as unlawful on several grounds. It is contended by the petitioner that the concerned officers could have no reason to believe that any

goods liable for confiscation were lying in the premises of the petitioners. It was also claimed that the concerned officers had no reason to believe that any records relevant to the proceedings would be available in the premises.

Representing the petitioner, the counsels also challenged the allegedly unlawful action of taking possession of cash during search.

It was also submitted that the laptop and mobile phones, which were taken away by the concerned officers, were subsequently returned to the petitioner. However, the cash collected was deposited in a Fixed Deposit in the name of the President of India.

The petitioner contended that the power under Section 67(2) of the GST Act to seize goods could be exercised only if the goods were liable for confiscation. The documents, books or things, could be seized only if the same are useful or relevant to any proceedings under the GST Act.

Mr Harpreet Singh, on behalf of the revenue, contended that the officers had only “resumed” the cash as per the panchnama, but was unable to point out any provision in the GST Act that entitles any officer of GST to merely “resume” assets.

The revenue was directed to refund the remaining amount “resumed” from the petitioners, along with interest.

The Division Bench of Justices Vibhu Bakhru and Amit Mahajan also directed to release the Bank guarantee furnished for the release of currency immediately.

The concerned GST officers, Superintendent Vinod Prakash Sharma, and Sandeep Dhama were also directed to be present at the court on 20 February 2023, for the next hearing.

To Read the full text of the Order CLICK HERE

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