CA Yash Shah
Quick Summary
Introduction The interpretation of legal definitions plays a crucial role,in the status quo about whether the term goods, as stipulated in the GST Act, includes cash. This matter holds substantial importance not only for taxation purposes but also in determining the authorities powers of confisca
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FAQ :
The inclusion of cash within the definition of 'goods' under the GST Act is a contentious issue. Some High Courts, like the Delhi High Court, have interpreted 'things' broadly to include cash, while others, like the Kerala High Court and the Gujarat High Court in a specific case, have ruled that cash cannot be seized under Section 67(2) unless it is part of the business's stock-in-trade.
The primary purpose of seizing 'goods' under Section 67 of the GST Act is to assist authorities in quantifying and demanding tax. It is not intended as a procedural mechanism for recovering taxes.
Recent High Court decisions suggest that cash seizure by GST authorities is generally not justified if the cash is not part of the appellant's business stock-in-trade. Findings related to unrecorded income are more suited to income tax authorities.
The Gujarat High Court ruled that the authority's power to seize is guided by the object of the taxing statute. In a specific case, it directed the immediate release of seized cash because it was not part of the appellant's business stock-in-trade and the Intelligence Officer's findings were deemed irrelevant under the GST Act.
According to sub-section (7) of Section 67, if no notice is given within six months of the seizure of goods, the goods shall be returned to the person from whose possession they were seized. This was applied in a case where seized cash was ordered to be returned.
No, findings related to income tax matters may not be relevant in the context of the GST Act. There is a distinction between the powers and scope of authorities under the Income Tax department and those under the GST Act.
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