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of <h1>Seized laptops and documents can be retained for investigation duration unlike goods with six-month limit under Section 67 CGST Act</h1> <h3>Dhruv Krishan Maggu Versus Principal Director General, DGGI (Hqrs.), RK Puram, New Delhi & Anr.</h3> Delhi HC dismissed writ petitions seeking return of seized laptop, computer, and documents from IGST refund fraud investigation involving 23 fake firms ... Period of limitation for retaining the seized goods - Seeking return of his laptop, computer, documents and other things which were seized during search proceedings - various allegations of IGST refund - According to the DGGI, further investigation revealed that a total number of 23 fake firms were opened in the names of persons who were found to be labourers, drivers, cooks, street hawkers, etc. The fraudulent refunds of IGST of more than Rs. 63 crores is stated to have been siphoned off by these persons/firms. HELD THAT:- There is a clear distinction brought about in the CGST Act, 2017 in case of inspection, search and seizure of ‘documents or books or things’ in contrast to seizure of ‘goods’. A perusal of sub-section 67(2) of the CGST Act, 2017 makes it clear that whereas the first proviso would apply qua seizure of goods, the second proviso would apply in respect of documents or books or things. In the case of documents or books or things, the same can be retained by the officer for so long as it is required for examination and for inquiry of proceedings under the CGST Act, 2017. This is in contrast with Section 67(7) as per which when goods are seized, the said seized goods have to be returned to the person who whom they were seized within six months of the seizure of goods, unless and until, the proper officer, on sufficient cause, extends the same for a further period of not exceeding then six months. By a conjoint reading of sections 67(2) second proviso, 67(3), 74(2), 74(10) the ‘documents or book or things’ can be retained for a maximum period of four and half years, within which period the notice has to be issued, plus thirty days from the date of erroneous refund. In the present case, the said period had not yet lapsed. Accordingly, at this stage, this Court does not deem it appropriate to direct release of the computer, laptop, documents and other things seized vide punchnama dated 28th August, 2019. Writ petitions dismissed. Issues:Petitioner seeks return of seized laptop, computer, and documents. Allegations of fraudulent GST refunds involving multiple individuals. Interpretation of Sections 67 and 74 of CGST Act, 2017 regarding seizure and retention of documents. Analysis:The case involves the Petitioner seeking the return of his seized laptop, computer, and documents following a search conducted by the Directorate General of GST Intelligence (DGGI) based on allegations of fraudulent GST refunds. The DGGI received communication regarding high-level transactions related to GST refunds credited to newly opened bank accounts. Subsequent investigations revealed non-functional and non-existent firms through which fraudulent refunds of over Rs. 63 crores were siphoned off. The Respondents allege the involvement of the Petitioner and others in availing and siphoning GST refunds, leading to the seizure of items in question.The Petitioner argues for the return of seized items under Section 67(7) of the CGST Act, 2017, which mandates the return of goods within six months of seizure. However, the Respondents contend that the seizure pertained to documents and not goods, governed by Section 67(2) and 67(3) allowing retention for inquiry purposes. Additionally, Section 74 deals with cases of fraud or wilful misstatement in availing Input Tax Credit, providing a timeframe of five years for determination of tax. The Respondents justify the retention of seized items based on ongoing investigations and the timelines prescribed under the law.The Court distinguishes between the seizure of goods and documents under the CGST Act, emphasizing the provisions for retention of documents for inquiry purposes. Considering the nature of the case and ongoing investigations, the Court finds the retention of seized items justified under Sections 67 and 74 of the Act. The judgment dismisses the writ petitions and directs the authorities to proceed in accordance with the law and prescribed timelines. The decision underscores the importance of adherence to legal procedures and timelines in such cases to ensure a fair and thorough investigation.
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