TaxTMI 
TaxTMI 
2026 (3) TMI 582
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....of Petitioner's parents (Exhibit-F), and directing release of the cash to the Petitioner with interest; (b) directing the Respondents to deposit the seized cash totally amounting to INR 1 Crore in the registry of this Hon'ble Court, and directing the registry to deposit the same in an interest-bearing fixed deposit with a nationalized bank, pending disposal of this petition; (c) directing Respondent No 1 to furnish a copy of Authorizations for Search issued in Form GST INS-01 in respect of searches conducted at the Petitioner's residence, Premises No 19 and residence of Petitioner's parents, pending disposal of this petition; (d) granting ex-parte ad-interim reliefs in terms of prayer clauses (b) and (c) above, and" 3. The challenge in the present Petition is in respect of two orders of seizure dated 27th June 2023 and 28th June 2023 issued by Respondent Nos. 2 and 3 respectively (hereinafter referred to as "the impugned seizure orders") inter alia seizing cash amounting to INR 1 crore from premises owned by the Petitioner, i.e., Office No 19, 1st Floor, Laxmi Nivas / Minty House, 2nd Panjrapol Lane, Charni Road, Mumbai, Maharashtra - 4....
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....lated persons within the meaning of Central Goods and Services Tax Act, 2017 (CGST Act). Mr. Hitesh Chheda was arrested on 21st July 2023 under the provisions of 132(1) of the CGST Act and subsequently was released on bail vide order 5th September 2023 passed by the Additional Chief Metropolitan Magistrate, 19th Court Esplanade, Mumbai. 5. It is in the backdrop of these facts, the question which has fallen for consideration in the present proceedings is whether the seizure of cash of INR 1 crore by the impugned seizure orders from the premises belonging to the Petitioner is justified in law and whether the Respondents had the power to seize the same under the provisions of the CGST Act. 6. With the assistance of Mr. Rastogi, Learned Counsel for the Petitioner and Mr. Mishra, Learned Counsel for the Respondents, we have perused the papers and the impugned seizure orders, and we proceed to decide the present petition. 7. Mr. Rastogi, Learned Counsel on behalf of the Petitioner has submitted that the seizure of cash by the Respondents is patently illegal and is not mandated by any of the provisions as envisaged under the CGST Act. The submissions on behalf of the Petitioner c....
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....her the impugned seizure orders did not record any "reasons to believe" to carry out the seizure proceedings. (vi) It was submitted that the "reason to believe" forms the undisputed core of search proceedings as per 67(2) of the CGST Act and the same is conspicuously absent in the present case. It was also submitted that the seized items were not secreted at any place as per the mandate of Section 67(2) of the CGST Act, and also no receipt under Section 67(11) of the CGST Act had been issued to the Petitioner despite taking possession of the several items, including cash as described in the impugned seizure orders. (vii) It was also submitted that the provisions of Section 67(7) of the CGST Act were not complied with and no notice in respect thereof was given within a period of six months from the seizure of the goods, and hence the Respondents were obliged to return the cash to the person from whose possession the same was seized i.e. in the present case, the Petitioner. (viii) During the course of hearing, learned Counsel for the Petitioner also drew our attention to the statement recorded of Mr. Hitesh Chheda, along with authorization of search dated 1....
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....bmitted on behalf of the Petitioner that cash/ Indian Currency is explicitly excluded from the definition of goods as it squarely falls within the definition of the term "money" as provided in sub-section 2 of Section 75 of the Act. 8. Per contra, learned Counsel for the Respondents submitted that the impugned seizure orders are justified in the facts of the present case, and also the seizure was made to unearth the alleged huge racket being operated by the Petitioner and Mr. Hitesh Chheda, who are friends, to claim fake ITC. He further submitted that the Petitioner in her statement recorded under Section 17 of the CGST Act on 10th April 2024 has categorically admitted that she had given the premises to Mr. Hitesh Chheda for his personal use and she did not have knowledge about the data, documents and goods which were kept in the said premises. Further he submitted that Mr. Chheda had voluntarily stated and confirmed that he was involved in the nexus of availing fake ITC, wherein fake invoices were issued from the said premises without actual movement of goods. It was therefore his submission that the Petitioner had no locus to file the present petition. The learned Counsel for ....
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....which is situated at Office No. 19, 1st Floor, Laxmi Niwas/Minty House, 2nd Panjrapole Lane, opp. Balkrishna Niwas, Charni Road, Mumbai-400004, she stated that she has given the said premises to her friend Shri Hitesh Chheda for his personal use and she don't have any knowledge regarding any of the documents/data/goods/things which were kept in the said premises. 18. With reference to para no. 13, I say that the contents thereof are denied. I further say that search proceedings were conducted vide Search Authorization having DIN 202306DWW00000818186 dated 26/06/2023 for (i) Office No. 19, 1st Floor, Laxmi Niwas/Minty House, 2nd Panjrapole Lane, opp. Balkrishna Niwas, Charni Road, Mumbai-400004, and Search Authorization having DIN. 202306DWW0000000A341 dated 26/06/2023 for (ii) B-1B, Ground Floor, 88, JITEKAR WADI, GROUND FLOOR, OPP VINAY HEALTH, Girgaon, Mumbai-400002. Both the search authorizations were duly executed and Panachanams dated 28.06.2023 and 27.06.2023 respectively were drawn, wherein, premises at (i was drawn in the presence of Petitioner and premises at (ii) was drawn in the presence of presence of parents of petitioner. Acknowledgement of receiving of b....
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....ore, cash may be subject to seizure under Section 67, particularly if it holds relevance to the proceedings under the Act. In the instant case, the cash was found to be secreted in a premises owned by Petitioner, who in her statement confirmed that she had given the premises to her friend shri Hitesh Chheda for his personal use. Whereas Shri Hitesh Chheda has voluntarily stated and confirmed that he is involved in the said nexus of availing fake ITC wherein fake invoices were issued from the said premises without actual movement of goods. They both were unable to reveal the actual source of this money and in fact confirmed to be the said money as unaccounted and proceeds of passing of and availment of fake ITC. Therefore, considering the grave nature of financial irregularities and violations of CGST act 201? involving a nexus of amount of GST evasion in excess of Rupees 312.8 crores, cash under the category of "things" as mentioned in section 67 of CGST Act 2017, were seized under INS-02. 24. Further, unaccounted cash, when found during a search, should be subject to seizure like any other valuable asset suspected to be linked to tax evasion. Cash can be critical evidence....
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....erse, arbitrary and without the authority of law. The provisions of Section 67(2) of the CGST Act have not been fulfilled in the facts of the present case inasmuch as the very ingredients as mandated in the said Section have not been complied with by the Respondents. It will be beneficial to reproduce Section 67(2) of the CGST Act, and the same reads as follows:- "67. Power of inspection, search and seizure.- (2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things: Provided that where it is not practicable to seize any such goods, the proper officer, or any officer authorised by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal w....
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....must coexist in order to confer jurisdiction on the Income-tax Officer. It is also imperative for the Income-tax Officer to record his reasons before initiating proceedings as required by Section 148(2). Another requirement is that before notice is issued after the expiry of four years from the end of the relevant assessment years, the Commissioner should be satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice. We may add that the duty which is cast upon the assessee is to make a true and full disclosure of the primary fact at the time of the original assessment. Production before the Income-tax Officer of the account books or other evidence from which material evidence could with due diligence have been discovered by the Income-tax Officer will not necessarily amount to disclosure contemplated by law. The duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts. Once he has done that his duty ends. It is for the Income-tax Officer to draw the correct inference from the primary facts. It is no responsibility of the assessee to advise the Income-tax Officer with regar....
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....see from assessment in the particular year because of his failure to disclose fully and truly all material facts. It is no doubt true that the court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the Income-tax Officer on the point as to whether action should be initiated for reopening assessment At the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant. remote and farfetched. which would warrant the formation of the believe relating to escapement of the income of the assessee from assessment. The fact that the words "definite information" which were there in Section 34 of the Act of 1922 at one time before its amendment in 1948 are not there in Section 147 of the Act of 1961 would not lead to the conclusion that action can now be taken for reopening assessment even if the information is wholly vague, indefinite, farfetched and remote. The reason for the formation of the believe must be held in good faith and should not be a mere pretence. 12. The powers of the Income-tax Officer to reopen assessment though wide are not plenary. The words of the statute ar....
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....ase of reference, it will be beneficial to reproduce the provisions of Section 67(7) of the CGST Act:- "Section 67. Power of inspection, search and seizure.- (7) Where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: PROVIDED that the period of six months may, on sufficient cause being shown, be extended by the proper officer for a further period not exceeding six months." Since a notice under Section 67(7) of the CGST Act, also has not been issued to the Petitioner, the Respondents are liable to release the cash back to the Petitioner. Even otherwise, as submitted by learned Counsel Mr. Rastogi on behalf of the Petitioner, the Petitioner is a care-giver of her elderly parents, from whose premises the cash was seized, and it is the Petitioner's contention that her mother is undergoing treatment for heart ailment for which she is in urgent need of cash. Learned Counsel for the Petitioner has submitted the documents of Saifee Hospital, which shows the medical condition of the mother of the....