The Delhi High Court has held that cash recovered during Search under Central Goods and Service Tax (CGST) from a Locked Room of assessee with the presence of Daughter in law of asseseee assuming that the possession belongs to her is invalid.
Baleshwari Devi, the petitioner challenged the impugning the action of the respondents in removing a sum of ₹19,50,000/- from her premises during a search conducted under Section 67 of the Central Goods and Service Tax Act, 2017 (CGST Acts).
The petitioner is a senior citizen and claimed that on 09.11.2021, a search was conducted in the residential premises bearing the adresss, 25/75, Shakti Nagar, New Delhi-110007, where the petitioner and her family reside.
At the material time, the petitioner was not present at her residence and the room occupied by her was locked. During the course of the search, respondents seized some files, loose papers and cheque leaves. They also found a sum of ₹19,50,000/- in cash and took possession of the same.
The Panchnama records that one room was found locked and the petitioner’s daughter-in-law, Smt. Seema Gupta, had informed the respondents that she did not have the keys to that room. During the search proceedings, the duplicate keys were made and the door of the room was opened in the presence of Smt. Seema Gupta.
The petitioner put forward the serious serious controversy whether the respondents have any authority to seize currency during search proceedings under Section 67 of the CGST Act.
It was viewed that the action of the respondents in dispossessing the petitioner or any of the family members of any of their assets in the proceedings under Section 67 of the CGST Act, without seizing the same, is illegal. The respondents cannot continue with the possession of the currency collected from the petitioner’s residence.
Mr. Atul Tripathi, counsel appeared for the respondents, submitted that no proceedings for returning the amount were undertaken as none had approached the concerned respondents for seeking return of the said amount.
The assumption that the cash recovered from the locked room was in the possession of Seema Gupta (the petitioner’s daughter-inlaw) is ex facie erroneous. It was recovered from a room that was locked and the record shows that Ms Seema Gupta did not have the keys to that room.
A Division bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan directed the respondents to refund the amount to the petitioner. Further held that “respondent No. 3 shall take immediate steps for pre-mature encashment of the fixed deposit and transfer of the proceeds to the account of the petitioner. 16. The petition is disposed of in the aforesaid terms.”
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