The Supreme Court of India upheld the decision of the Kerala High Court in Shabu George vs State Tax Officer wherein it was held that Revenue Department cannot seize cash that does not form part of stock in trade in Goods and Service Tax (GST) case.
The Revenue Department conducted investigation on the premises of Shabu George for detection of tax evasion under the Central Goods and Services Tax Act, 2017. During the search, a significant amount of cash was seized from the Respondent’s premises and it was contented that the Revenue Department did not issue a show cause notice to the Respondent in connection with the investigation even after 6 months.
Aggrieved by the seizure of cash the Respondent filed a writ before the Kerela High Court and contended that fact that the statutory provisions authorize the seizure of ‘things’, the word ‘things’ would include not cash in case where the cash did not form part of the stock in trade of any business since, the cash found during the investigation pertains to cash received in marriage as gift.
A Division Bench of the Kerala High Court observed that seizure of cash from the premises of the appellants was wholly uncalled for and unwarranted. Further 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 a continued retention of the said amount with the respondent.
Aggrieved by the order of the Kerala High Court the Revenue Department filed a Special leave petition before the Supreme Court.
A Two-Judge Bench comprising of Justices BV Nagarathna and Ujjal Bhuyan observed that “We are not inclined to interfere with the judgment and order impugned in this petition. The special leave petition is, accordingly, dismissed.”
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