2024-VIL-553-KAR
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SGST High Court Cases

GST – Scope of Section 67(2) of the CGST Act, 2017 – Search and seizure operation - Whether the expression “things” contained in Section 67(2) of the CGST Act, 2017 includes cash/currency seized during the course of search and seizure – Confiscation of electronic devices - Validity of impugned seizure order - HELD - the expression “things” contained in Section 67(2) of the CGST Act does not include cash / currency / money found during the course of search and seizure and the revenue do not have jurisdiction or authority of law to confiscate cash / currency / money during the Search and seizure and any such confiscation would not only be illegal and arbitrary but also in clear contravention of the provisions contained in Section 67(2) of the CGST Act - the object of Section 67(2) of the CGST Act is not unearth unaccounted wealth nor can it be said to be a mechanism for recovering tax by seizing assets, especially when there are separate mechanisms for that purpose and on this score also, cash / currency / money are not “things” within the meaning of the said provision and cannot be confiscated during the course of search and seizure in terms of the provision Section 67(2) of the CGST Act - the views taken by the High Courts of Delhi, Gujarat and Kerala have laid down the correct law and the judgment of the Madhya Pradesh High Court in Kanishka Matta’s case, is not based on the correct interpretation of the said provision – the respondents are not entitled to retain the subject cash illegally confiscated from the petitioners despite repeated representations and consequently, necessary directions are to be issued to the respondents to return the entire subject cash together with accrued interest back to the petitioners within a stipulated timeframe – the writ petition is allowed - Confiscation of electronic devices - Validity of impugned seizure order – HELD – on examination of the electronic devices viz., laptop, hard disks and mobile phones found during the search, the respondent had reasons to believe that the said electronic devices are useful and relevant for proceedings under the CGST Act and consequently, liable for confiscation. As rightly contended by the ld. Senior counsel for the petitioner, except referring to the said electronic devices and reasons for their confiscation, absolutely no reasons are assigned as to why the subject cash was being confiscated or that the same was necessary for proceedings under the CGST Act. Under these circumstances, it is clear that the impugned seizure order without recording any reasons that warranted confiscation is contrary to the provisions of Section 67(2) of the CGST Act and on this ground alone, the impugned order deserves to be quashed – in terms of Section 67(2) of the CGST Act, before search and seizure was conducted by the respondent it was incumbent upon him to come to the conclusion that he had “reasons to believe” that the subject cash was relevant or useful for any proceedings under the CGST Act - in the absence of any material to indicate that the respondent had such reasons to believe which were recorded in writing by the respondents prior to conducting of search and seizure, the pre-condition/condition precedent for conducting the said search and seizure were conspicuously absent and missing in the facts and circumstance of the instant case, as a result of which the entire proceedings including the impugned seizure order deserves to be quashed - in the absence of any reference to any reasons whatsoever for seizure of the subject cash in the impugned order or other material on record, the impugned seizure order deserves to be quashed on this ground also.
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