The Kerala High Court directed to release of cash as the department retained the seized cash which included a demonetised 2000 Rs note for 6 months without issuing a show cause notice(SCN).
T H Fazil, T A Hassan, Zubaida Hassan, and Noufal Hassan, the petitioner filed the writ petition questioning the seizure of cash from the premises of the petitioner vide Exhibits P1 and P2 seizure memos dated 22.12.2020. An amount of Rs.31,50,000/- and Rs.3,40,000/- was seized from the petitioner Nos. 1 and 4 respectively.
The counsel for the petitioners submitted that the GST authorities have no power under the Act and the Rules thereto to seize the cash of a dealer, in as much as the cash seized is not ‘stock in trade’. The counsel for the petitioner has also placed reliance on the decision in Shabu George & another v. State Tax Officer (IB) State Goods & Services Tax Department and others.
The Government Pleader does not dispute the legal position as contended by the counsel for the petitioners. The cash was seized from the petitioners’ premises on 22.12.2020. The cash seized from the petitioners’ premises includes the currency of denomination of Rs.2000/- and the same would cease circulation by the end of September 2023.
It was observed that as the respondent has retained the seized cash for more than six months and is yet to issue a show-cause notice to the appellants in connection with the investigation, there can be no justification for continued retention of the said amount with the respondent. The appeal was allowed by directing the first respondent to forthwith release to the appellant the cash seized from the premises, against a receipt to be obtained from him.
Against the said order, the State had preferred an SLP before the Supreme Court and the same was dismissed.
Considering the aforesaid facts, the single judge bench of Justice Dinesh Kumar Singh allowed the writ petition and directed the respondents to release the cash seized from the petitioners and credit the same to the account of the petitioners within five days.
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