Seized cash release lies before Income Tax Department when handed over under requisition, while GST reply time was extended.
Where cash seized by State GST authorities had already been handed over to the Income Tax Department under a requisition under Section 132A of the Income-tax Act, the request for its release could not effectively be pursued against the GST authorities, and the proper remedy lay before the Income Tax Department. In the GST proceedings, the petitioners were also granted a short extension of time to file a reply to the notice under Section 74(1) of the CGST/SGST Act, and the adjudication was directed to continue in accordance with law.
Issues: (i) whether the petitioners were entitled to immediate release of the cash seized by the State GST authorities when the amount had already been handed over to the Income Tax Department pursuant to a requisition under the Income-tax Act, 1961; (ii) whether the petitioners should be granted further time to file a reply to the notice issued under Section 74(1) of the CGST/SGST Act.
Issue (i): entitlement to release of the seized cash.
Analysis: The cash seized from the petitioners had been taken back from the treasury and handed over to the Income Tax Department pursuant to its requisition under Section 132A of the Income-tax Act, 1961. In that situation, the request for release of the cash could not be effectively pursued against the State GST authorities, and the appropriate course was to approach the Income Tax Department.
Conclusion: The petitioners were relegated to approach the Income Tax Department for release of the cash.
Issue (ii): grant of further time to reply to the notice under Section 74(1) of the CGST/SGST Act.
Analysis: The respondents had already issued notice in the adjudication proceedings, and the petitioners sought additional time to submit their reply. The request was accepted, and a short extension was granted for filing the reply, which was to be considered in accordance with law.
Conclusion: Further time was granted to the petitioners to file their reply, and the adjudication proceedings were directed to continue according to law.
Final Conclusion: The writ petitions were disposed of by leaving the petitioners to pursue release of the cash before the Income Tax Department and by permitting them to file a reply in the GST adjudication proceedings within the extended time granted.
Ratio Decidendi: Where seized cash is already handed over to the Income Tax Department pursuant to a requisition under Section 132A of the Income-tax Act, the appropriate remedy for release lies before that Department, while ancillary GST adjudication may proceed in accordance with law.
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