2023 (11) TMI 954 - HC - GST

Brothers Win Challenge Against Cash Seizure, Court Orders Full Refund with Interest Under CGST Act Section 67

HC allowed petition for release of seized cash under CGST Act. Two brothers challenged seizure of Rs. 1,15,00,000 during search. Court directed ... Power to seize cash during search under the Central Goods and Services Tax framework (Section 67) - Requirement of satisfactory explanation for retention of cash discovered during search - Obligation to refund resumed/seized cash with accrued interest where seizure is not legally sustainable - Preservation of prosecutorial or assessment action by Income Tax or other authorities notwithstanding refundPower to seize cash during search under the Central Goods and Services Tax framework (Section 67) - Requirement of satisfactory explanation for retention of cash discovered during search - Obligation to refund resumed/seized cash with accrued interest where seizure is not legally sustainable - Seizure and retention of cash found during search under Section 67 of the CGST Act was not sustainable and the resumed amounts were to be refunded with interest. - HELD THAT: - The Court found that the officers had no power to permanently retain the cash merely because the petitioners were unable to provide a satisfactory explanation for its source, the position being squarely covered by earlier decisions of this Court. On that basis the petition was allowed and the respondents were directed to remit the respective seized amounts along with accrued interest to the bank accounts of the petitioners. Administrative details were specified: petitioners to provide bank account details within one week and respondents to effect remittance within two weeks. The order leaves open the right of the Income Tax Department or any other authority to take lawful steps in relation to the possession of such cash under the relevant statute. [Paras 4, 5, 7, 8, 9]Petition allowed; seized amounts to be remitted to the petitioners with accrued interest, subject to rights of other authorities to proceed in accordance with law.Final Conclusion: The writ petition was allowed following precedent; respondents were directed to refund the resumed cash with accrued interest to the petitioners' bank accounts within the timelines ordered, without prejudice to any action by Income Tax or other authorities. Issues involved: Petition for release of seized cash u/s 67 of the CGST Act, 2017.Summary:The petitioners, two brothers residing in separate floors of a building, filed a petition seeking the release of an aggregate amount of Rs. 1,15,00,000/- seized during a search conducted at their residential premises under Section 67 of the Central Goods and Services Tax Act, 2017. The search revealed cash amounts in the bedrooms of each petitioner, with no satisfactory explanation provided for the source of the cash. The petitioners contended that the officers had no power to seize cash under Section 67 of the CGST Act without proper explanation, citing previous decisions of the Court. The petition sought the release of the seized money, which the respondents had kept in a fixed deposit bearing interest. The Court directed respondent no. 2 to remit the respective amounts along with accrued interest to the bank accounts of each petitioner. The petitioners were instructed to provide bank account details to the respondents within one week, with the amounts to be remitted within two weeks thereafter. It was clarified that other authorities, such as the Income Tax Department, were not precluded from taking necessary steps regarding the petitioners' possession of cash, and the respondents were also allowed to take further action under relevant statutes within the bounds of the law.