Cash cannot be seized without official seizure under CGST Act

The Delhi High Court has ruled that the Revenue Department cannot take possession of personal assets, including cash, without following the official seizure procedures outlined in the Central Goods and Services Tax Act, 2017. In a case involving Ms. Baleshwari Devi, the court found the department's action of seizing cash found in a locked room during a search to be illegal. The court ordered the refund of the seized currency, emphasising the need for strict adherence to statutory provisions.

The Hon'ble Delhi High Court in Baleshwari Devi v. Additional Commissioner (Anti-Evasion),Central Goods and Service Tax [W.P.(C) 5056 of 2023 datedJuly 21, 2023] held that Revenue Department has no power to take possession of the personal assets without official seizure under the Central Goods and Services Tax Act, 2017 ("the CGST Act"). 

Facts

Ms. Baleshwari Devi ("the Petitioner") is a proprietor of M/s Bishan Saroop Ram Kishan. A search was conducted by the Revenue Department ("the Respondent") at the residential premises of the Petitioner on November 09, 2021 in the absence of the

Petitioner, during the course of the search, the Respondent seized some files, loose papers and cheque leaves. 

During the search proceedings, one room was found locked which was opened by the duplicate keys in the presence of Smt. Seema Gupta (daughter-in-law of the Petitioner) and found a sum of INR 19,50,000/- in cash and took possession of the same and placed in a fixed deposit.

The Petitioner filed a writ before the Hon'ble Delhi High Court requesting for direction to the Respondent for return of the cash.

Issue

Whether the Revenue Department has authority to seize currency during search proceedings under Section 67 of the CGST Act?

Held

The Hon'ble Delhi High Court in W.P.(C) 5056 of 2023 held as under: 

• Noted that, there is no dispute that the Respondent are required to act strictly in accordance with the provisions of the statute and the rules thereunder. 
• Further noted that, the action of the Respondent 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.
• Held that, the Respondent cannot continue with the possession of the currency collected from the Petitioner's residence.
• Opined that, the assumption that the cash recovered from the locked room was in the possession of Seema Gupta (the Petitioner's daughter-in law) is ex facie erroneous.
• Directed the Respondent to refund the amount to the Petitioner to obviate any further controversy in this regard.