Section 67(2) Of The GST Act Does Not Empower Seizure Of Currency Available In Premises During Search: Delhi High Court

The Delhi High Court has held that Section 67(2) of the GST Act does not empower the seizure of currency available on premises during a search.

The bench of Justice Vibhu Bakhru and Justice Purushaindra Kumar Kaurav has directed the department to remit the amount seized to the petitioner’s bank account within a period of two weeks, along with accrued interest.

The petitioner sought the direction be issued to the respondent/department to release Indian currency amounting to Rs.15,92,000, which was seized by the respondent during the search.

The respondent or department conducted a search under Section 67 of the Central Goods and Services Tax Act at the residential premises of the petitioner. The petitioner claimed that prior to the search, he had joined the investigation. The department had no reason to conduct any search at the petitioner’s premises, particularly as he is not a ‘taxpayer' under the CGST Act.

During the course of the search, the concerned officers seized various documents as well as currency lying in a locker at the petitioner’s premises. The petitioner claims that he was not present at the time of the search, but the family members who were present at the material time requested that the officials not seize the amount as it belonged to the family. It is averred that they explained that the currency was kept in the locker as a precautionary measure because the house was under renovation or construction and a number of labourers were working at the premises.

The department claimed that the petitioner had made a voluntary statement and admitted that he was involved in a racket involving the issuance of fake invoices along with other accused. The respondent claimed that the persons have issued invoices from various firms without the supply of goods, resulting in an input tax credit (ITC) of approximately Rs. 11 crores being availed of. The petitioner was summoned on various dates.

However, it is alleged that the petitioner attempted to evade the investigation but finally appeared before the concerned officers on February 29, 2020.

The petitioner also claimed that he had signed various documents and statements under threat and coercion by the concerned officers. He was not involved in making any supplies, is not a taxpayer, and is not concerned with the alleged fake ITC availed by any other entity.

The court held that Section 67(2) of the CGST Act does not empower any seizure of the currency. It was clarified that the department was not precluded from taking any steps or measures as available in accordance with the law.

Case Title: Rajeev Chhatwal Versus Commissioner Of Goods And Services Tax (East)

Citation: 2023 LiveLaw (Del) 770

Date: 24.08.2023

Counsel For Appellant: Gagan Kumar Singhal

Counsel For Respondent: Harpreet Singh

Click Here To Read The Order