TaxTMI 
TaxTMI 
2026 (10) TMI 85
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....bile phone, (Sl NO. 0K53C21132200388), (iii) 3 nos. of pen drive; SandiskCruzer Blade 32 GB, USB Sandisk 3.2 Gen1 128 GB, HP USB Flash Drive USB 32 GB and (iv) Bank Card of ICICI Bank bearing no. 5344246645005938 seized, pursuant to a search and seizure procedure conducted by the respondent authorities. 3. The Senior Counsel for the petitioner has submitted that while the very seizure of the aforesaid articles was illegal, the respondent authorities had also seized an amount of Rs. 11 lakhs in cash from the petitioner; however, the cash amount of 11 lakhs had been returned to the petitioner during the pendency of these proceedings on 19.08.2026. 4. The Senior Counsel for the petitioner has submitted that the issue as to whether cash money would be within the realm of the terms used in Section 67 of the Central Goods and Services Tax Act or would fall within the definition of goods as given in Section 252 of the CGST Act has been answered by various High Courts, holding that the cash would not fall within any of the terms used in Section 67 of the CGST Act and, therefore, he has submitted that the seizure of the cash amount was illegal. He has further submitted that, perhap....
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....itted that in accordance with law, after six months of the seizure of the goods, they were required to have been returned to the petitioner. He has submitted that since the items are also required in connection with the proceedings which are assailed in WP(C) No. 2501 of 2026, the investigating officer had not returned the goods since the investigation therein is not complete. 9. Mr. S.C. Keyal has also clarified that the seized articles in the present case would fall within the category of goods covered by sub-section 7 of Section 67. 10. I have heard both the learned Senior Counsel appearing for the contesting parties and I have also considered the materials placed before me. 11. The learned Senior Counsel appearing for the petitioner has placed reliance on the following judgments; 1. Shabu George & Anr. Vs. State Tax Officer (IB) Thiruvananthapuram & Ors. Reported in (2023) 116 GSTR 2003. 2. State Tax Officer (IB) & Ors. Vs. Shabu George & Anr. SLP (Civil) Diary No. 27670/2023. 3. Deepak Khandelwal vs. Commissioner of CGST, Delhi West & Anr. Reported (2023) 116 GSTR 278 (Delhi) 4. Commissioner of CGST vs. Deepak Khandelwal, SLP (Ci....
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.... during the said process and any such confiscation would not only be illegal and arbitrary but also in clear contravention of the provisions contained in Section 67(2) of the CGST Act. It is also significant to note that the object of Section 67(2) of the CGST Act is not unearth unaccounted wealth (as in income tax) nor can it be said to be a mechanism for recovering tax by seizing assets, especially when there are separate mechanisms in Sections 73, 74, 78 and 79 of the CGST Act for that purpose and on this score also, I am of the view that cash/currency/money are not "things" within the meaning of the said provision and cannot be confiscated during the course of search and seizure in terms of the said provision." "Point No. 1 is accordingly answered by holding that the expression "things" contained in Section 67(2) of the CGST Act does not include cash/currency/money found or recovered during the course of search and seizure under the said provision." Further at paragraph 10.3, the High Court of Karnataka has held as follows, 10.3 A perusal of the second proviso to Section 67(2) of the CGST Act, as well as Section 67(3) clearly indicate that it was incumbent ....
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....es, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate; (ia) derivative; (ib) units or any other instrument issued by any collective investment scheme to the investors in such schemes; (ic) security receipt as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforce-ment of Security Interest Act, 2002; (id) units or any other such instrument issued to the investors under any mutual fund scheme; (ii) Government securities; (iia) such other instruments as may be declared by the Central Government to be securities; and (iii) rights or interest in securities;" A plain reading of clauses (i) to (iv) of sub-section (1) of section 130 of the Act indicates that the goods, which are supplied or received in contravention of the provisions of the Act with the intent to evade payment of tax; goods which are unaccounted for and chargeable to tax supply of goods chargeable to tax, by a taxpayer, without applying for registration; and cases where the taxpayer contravenes....