TaxTMI 
TaxTMI 
2026 (3) TMI 1126
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.... further submitted that there was no independent witness present at the time of search and seizure operation. Mr. Roy contends that the respondent GST authorities have obtained the signature of their employees as witnesses who cannot be termed as „independent witness‟ in terms of Section 67(10) of the 2017 Act. It is further submitted that during the said operation, cash to the tune of Rs. 24 lacs was sealed in the petitioners‟ premises and was kept in the custody of the petitioners themselves thereby depriving the petitioners of their right to use the same. It is further submitted by Mr. Roy that in the search and seizure operation conducted at the petitioners‟ factory premises, no signature of the Panchas have been obtained in the Panchnama and there is no signature of the witnesses on the order of seizure in form GST INS-02. By an order dated September 16, 2025, the respondent GST authorities had been directed to file a report in the form of an affidavit in view of the petitioners‟ insistence for immediate release of goods and cash to the tune of Rs. 24 lacs. In terms of the said order a report in the form of an affidavit has been filed ....
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....rted in 2025 (8) TMI 1293 - SC Order. As regards the requirements of recording of reasons to believe, Mr. Roy has relied on the following judgment: i) Commissioner of CGST -Vs.- R. J. trading Co., reported in (2024) 160 taxmann.com 532 (SC). Mr. Banerjee, learned advocate appearing for the respondents, however, submits that the respondent GST authorities have rightly seized the cash and in any case the cash is still in the custody of the petitioners. It is further submitted that since retention of cash to the tune of Rs. 24 lacs was found by the respondent GST authorities to be suspicious, the respondent GST authorities had already intimated the Income Tax authority about the same and as such their action in sealing the petitioners‟ cash cannot be faulted. As regards the petitioners‟ contention that there is no reason to believe for the purpose of initiating the impugned proceeding, it is submitted that the respondents would be able to demonstrate that there are indeed good reasons to believe that the petitioners have suppressed the transaction relating to supply of goods and as such the search and seizure proceedings have been validly initiated and....
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.... 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 with the goods except with the previous permission of such officer: Provided further that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act." A meaningful reading thereof would lead to the conclusion that the GST authorities can seize goods or documents or books or things if they have reasons to believe that such goods or documents or books or things shall be useful or relevant to any proceeding under this Act and have been secreted in any place. Section 2(52) of the said Act of 2017 defines goods as follows: " 'goods' means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things at....
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....nment, the same may be disposed of, after their seizure. 38. The second category of items - that is, items other than goods, which the proper officer believes are liable for confiscation - which can be seized are 'documents or books or things'. Sub-section (2) of Section 67 of the Act makes it amply clear that such items - that is, documents or books or things - may be seized if the proper officer is of the opinion that it shall be useful or relevant to any proceedings under the Act. The words 'useful for or relevant to any proceedings under the Act' control the proper officer's power to seize such items. 39. Documents and books are also covered under the wide definition of 'goods' under Sub-section (52) of Section 2 of the Act but the same are not goods that are liable for confiscation. Seizure of such documents or books is not contemplated for the reason that they are subject matter of supplies in respect of which tax has been evaded; seizure of books and documents is contemplated only for the purpose that they may contain information, which may be useful or relevant for any proceeding under the Act. Hence, the purpose of providing fo....
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....under the Act or Rules made thereunder, the same shall be returned within a period of thirty days. Although, there is no ambiguity in the language of Sub-section (2) of Section 67 of the Act that seizure of books or documents or things is permissible only if the same are considered useful for or relevant to the proceedings under the Act; Sub-section (3) of Section 67 makes it amply clear that the purpose of seizure of books or documents or things is only for the purpose of reliance in the proceedings under the Act. It, thus, posits that if the documents or books or things are not relied upon in any notice that is issued, the same are liable to be returned. 44. It follows from the contextual interpretation of Sub-section (2) and Sub-section (3) of Section 67 that seizure of books or documents or things are only for the purpose of relying on such material in proceedings under the Act. 45. It is also relevant to refer to Sub-section (11) of Section 67 of the Act. The said Sub-section empowers the proper officer to seize, for reasons to be recorded in writing, the accounts, registers or documents, which are produced before him and to retain the same so long as it is n....
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....has been granted. As stated above, it is contextually clear that exercise of such power is restricted only in cases where in the opinion of the proper officer, seizure is useful for or relevant to any proceedings under the Act. The second proviso of Sub-section (2) and Sub-section (3) of Section 67 of the Act makes it amply clear that the purpose of seizure is for the purpose of relying on the same in proceedings under the Act. ........ 56. There may be cases where the Revenue finds that a particular currency note or any particular asset has evidentiary value to establish the Revenue's case. Illustratively, a delinquent dealer supplies goods without invoices only on presentation of a currency note that bears a particular number. The presentation of the currency note is used as a means of authenticating the identity of the purchaser. The number of the particular currency note is recorded in diary maintained by the purchaser. The Revenue Officer ascertains this modus operandi of evasion of taxes. The currency note, corelated with the diary, would be relevant in establishing evasion of tax in respect of certain goods. Undoubtedly, in such cases, the currency note is mater....
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....being passed only in view of the peculiar facts of this case where GST authorities have not been able to demonstrate that the seized cash shall be useful or relevant to any proceeding to be undertaken by the GST Authorities against the petitioner under the said Act of 2017 or is relatable to any transaction that they require to establish vis a vis the petitioner. It is further clarified that this direction of de-sealing would by itself not be treated as a stamp of validity on the petitioners‟ custody/possession of the said amount and the other wings of the revenue authorities - whether GST or Income Tax or any other statutory authority would be free to take such action as may be permitted or permissible in law if the petitioners are found to be in possession of the said amount de hors law. This order shall not be treated as a passport by the petitioner to bypass any action that can be taken against the petitioner if retention or possession of the said cash by the petitioners is otherwise found to be illegal. As regards the other issue which is involved pertaining to the validity of the search and seizure proceeding as raised by the petitioners in the writ petition, the ....