[GST] Cash Included In Definition Of 'Things', Can Be Seized In GST Search: MP HC [Read Judgment]
The Madhya Pradesh High Court recently ruled that section 67(2) of the Central Goods and Services Tax Act, 2017 empowers the competent officer to seize not only goods, documents or books or things, but also cash / money as the same is included within the meaning of the term "things" appearing in Section 67(2).Section 67, on the Power of inspection, search and seizure, in its...
The Madhya Pradesh High Court recently ruled that section 67(2) of the Central Goods and Services Tax Act, 2017 empowers the competent officer to seize not only goods, documents or books or things, but also cash / money as the same is included within the meaning of the term "things" appearing in Section 67(2).
Section 67, on the Power of inspection, search and seizure, in its sub-section(2) provides that where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under the Act, are secreted in any place, he may authorise any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things.
Justices S. C. Shukla and Shailendra Sharma explain that the word "things", keeping in view its dictionary meaning, includes cash / money and it is a well settled preposition of law that in interpreting a statute the court must adopt that construction which suppresses the mischief and advances the remedy. "This is a rule laid down in Heydon's case, also known as the rule of purposive construction or mischief rule", said the bench.
The petitioner before the Court was the wife of the Proprietor of a firm in the business of Confectionery and Pan Masala items. The petitioner had urged that a search operation was carried out by the Senior Intelligence Officer, DGGSTI, Indore at their business premises as well as residential premises and a Panchnama was drawn on 31/05/2020. The plea was filed seeking an order to the respondent-officers to release the cash amounting to Rs.66,43,130/- seized from the residential premises of the petitioner and her husband.
"This Court has carefully gone through Section 67 of the CGST Act, 2017 and the expression used in sub-section (2) of Section 67 is "confiscation of any documents or books or things, which in proper officer's opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place". Thereafter, sub-section (2) has two provisos and first proviso relates to goods and the second proviso refers to documents or books or things so seized shall be retained", said the bench.
The core issue before the Court was that whether expression "things" covers within its meaning the cash or not. In the opinion of the Court, the CGST Act, 2017 has to be seen as a whole and the definition clauses are the keys to unlock the intent and purpose of the various sections and expressions used therein, where the said provisions are put to implementation. "Section 2(17) defines "business" and Section 2(31) defines "consideration". In the considered opinion of this Court a conjoint reading of Section 2(17), 2(31), 2(75) and 67(2) makes it clear that money can also be seized by authorised officer", opined the bench.
The bench held that the word "things" in Section 67(2) of the CGST Act, 2017 is to be given wide meaning and as per Black's Law Dictionary, any subject matter of ownership within the spear of proprietary or valuable right, would come under the definition of " thing". Similarly, in the Wharton's Law Lexicon, the word "thing" has been defined and it includes "money".
"It is a cardinal principle of interpretation of statute that unreasonable and inconvenient results are to be avoided, artificially and anomaly to be avoided and most importantly a statute is to be given interpretation which suppresses the mischief and advances the remedy", said the bench.
Therefore, keeping in view the aforesaid interpretation of the word "thing", the bench concluded that money has to be included and it cannot be excluded as prayed by the petitioner from Section 67(2).
The bench noted that the present case is at the stage of search and seizure- a search has been carried out and proceedings are going on. Resultantly, keeping in view the totality of the circumstances of the case, the material available in the case diary and also keeping in view Section 67(2) of the CGST Act, 2017, the Court was of the opinion that the authorities have rightly seized the amount from the husband of the petitioner and unless and until the investigation is carried out and the matter is finally adjudicated, the question of releasing the amount does not arise.
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