2020 (9) TMI 42 - HC - GST

Court upholds cash seizure under CGST Act, rejects constitutional claims, emphasizes investigation - Petitioner lacks standing.

Smt. Kanishka Matta Versus Union of India And Others

The court dismissed the writ petition, upholding the seizure of cash under Section 67(2) of the CGST Act, 2017. It found that the authorities had the ... Jurisdiction - power to effect seizure of cash from petitioner - Section 67(2) of the Central Goods and Services Tax Act, 2017 - petitioner's contention is that the word “money” is not included in Section 67(2) of the CGST Act, 2017 and therefore, once the “money” is not included under Section 67(2) of the CGST Act, 2017 the Investigating Agency / Department is not competent to seize the same - illicit supply of Pan Masala of various brands without invoices and without payment of applicable GST. Whether expression “things” covers within its meaning the cash or not? - HELD THAT:- In the considered opinion of this 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 authorized officer - The word “things” appears in Section 67(2) of the CGST Act, 2017 is to be given wide meaning and as per Black's Law Dictionary, 10th Edition, any subject matter of ownership within the spear of proprietary or valuable right, would come under the definition of “ thing” (page No.1707). Thus, keeping in view the aforesaid interpretation of the word “thing” money has to be included and it cannot be excluded as prayed by the petitioner from Section 67(2). The present case is at the stage of search and seizure. A search has been carried out and proceedings are going on. 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, this Court is 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 - Petition dismissed. Issues Involved:1. Legality of the seizure of cash under Section 67(2) of the CGST Act, 2017.2. Alleged violation of Articles 14 and 19 of the Constitution of India.3. Validity of the confessional statements and their subsequent retraction.4. Petitioner's locus standi to challenge the seizure.Issue-wise Detailed Analysis:1. Legality of the Seizure of Cash under Section 67(2) of the CGST Act, 2017:The petitioner argued that the respondents had no authority under Section 67(2) of the CGST Act, 2017, to seize cash as it does not fall under 'Document, Book or Things' as defined in the Act. The court examined the relevant statutory provisions, including Section 2(17) defining 'business,' Section 2(31) defining 'consideration,' and Section 2(75) defining 'money.' It concluded that a conjoint reading of these sections with Section 67(2) indicates that money can be seized by the authorized officer. The court emphasized that the term 'things' in Section 67(2) should be interpreted broadly to include money, citing definitions from Black's Law Dictionary and Wharton's Law Lexicon. The court also referred to the principle of statutory interpretation that aims to suppress mischief and advance the remedy, supporting a wide interpretation of 'things' to include money.2. Alleged Violation of Articles 14 and 19 of the Constitution of India:The petitioner claimed that the seizure of cash and the raid on their residential premises violated Articles 14 and 19 of the Constitution. The court did not find merit in these arguments, noting that the search and seizure were conducted based on specific information and under the provisions of the CGST Act. The court referred to previous judgments, including the Division Bench's decision in Sumedha Dutta & Another Vs. The Union of India & Another, which limited judicial interference in matters of search and seizure, especially at the initial stages. The court emphasized that the statutory mechanism under the CGST Act provides adequate procedural safeguards.3. Validity of the Confessional Statements and Their Subsequent Retraction:The petitioner argued that the confessional statements made by her husband were obtained under duress and were later retracted. The court referred to the Supreme Court's ruling in Surjeet Singh Chhabra Vs. Union of India, which held that confessional statements made before Customs Officers are admissible even if retracted later. The court also cited the Division Bench's decision in R. S. Company Vs. Commissioner of Central Excise, which upheld the validity of confessional statements in favor of the revenue. The court concluded that the retraction of the confessional statement does not invalidate the initial confession, especially at the investigation stage.4. Petitioner's Locus Standi to Challenge the Seizure:The respondents argued that the petitioner does not have the locus standi to file the petition as the seized cash and documents do not pertain to her. The court noted that the petitioner's husband had admitted that the seized cash was the sale proceeds of illegally sold Pan Masala without payment of GST. The court found that the petitioner's challenge to the seizure lacked merit, given the ongoing investigation and the statutory provisions justifying the seizure.Conclusion:The court dismissed the writ petition, holding that the authorities were justified in seizing the cash under Section 67(2) of the CGST Act, 2017. The court emphasized that the investigation must be allowed to proceed, and the question of releasing the seized amount does not arise until the matter is finally adjudicated. The court's decision was based on a comprehensive interpretation of the statutory provisions and relevant case law, ensuring that the seizure was legally sound and within the scope of the CGST Act.