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SGST High Court Cases

GST – Seizure of Cash, Section 132A Income Tax Act, 1961 – Challenge to legality of cash seizure by the GST Department during proceedings under Section 74 of the CGST/SGST Act, which was subsequently handed over to the Income Tax Department under Section 132A of the Income Tax Act - Appellants contended that the Department lacked jurisdiction to seize cash not forming part of stock in trade and sought return of the seized amount - Whether the initial seizure of cash by the State GST Department from the appellants' premises and subsequent handover of the seized cash to the Income Tax Department validates the continued retention of the said cash by the authorities – HELD - the initial seizure of cash by the State GST Department was blatantly illegal and without the authority of law, reasoning that the power of GST authorities to seize "thing" under the statute does not extend to seizing cash from a dealer's premises unless such cash constitutes stock in trade - the subsequent handing over of the illegally seized cash to the Income Tax Department, even pursuant to a requisition under Section 132A of the Income Tax Act, does not rectify the initial illegal seizure nor legitimize the continued withholding of the money, as the illegality originates from the inception of the seizure - Neither the GST Department nor the Income Tax Department can retain the cash prior to the finalization of their respective proceedings - the Income Tax Department is directed to forthwith release the seized cash amounts to the appellants - Both the Departments can continue their proceedings from the stage they presently stand without considering the seizure as valid under Section 132A of the IT Act - The writ appeals are disposed
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