TaxTMI 
TaxTMI 
2026 (10) TMI 79
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....a, Mr. Jatin Harjai with, Mr. Rohan Agarwal & Mr. Palash Gupta, Mr. Rahul Lakhwani with Mr. Aaditaya Sharma & Mr. Wilson Joy. For the Respondent(s): Mr. Sandeep Pathak with Ms. Jaya Pathak, Mr. Kinshuk Jain, Ms. Mahi Yadav, AAG with, Mr. Rohan Mittal, Ms. Yuvika Pilania & Mr. Ayush Jain, Mr. Ajay Shukla with, Mr. Raghav Sharma, Ms. Jyoti Sharma, & Mr. Shivam Sharma, Mr. C.S. Sinha with, Mr. Dev Yadav. Shiv Shankar Oil Udyog, M/s Jindal Shakti Cement, Sube Singh Chouhan, Anil Kumar Agarwal Prop. M/s Shree Radhey Krishna Stonex, Arun Agarwal Prop. M/s. Agarwal Stonex, Lalita Agarwal Prop. M/s. Jawla Stonex, Rachna Agarwal Prop. M/s. Shree Sainath Stonex, Global Export, Mrs. Rachna Jain, Mr. Shanuj Jain, Shri Nath Glass Company, Shri Hindustan Glass Versus Additional Director General, Directorate General Of Goods And Service Tax Intelligence Jaipur Zonal Office Jaipur, Senior Intelligence Officer, Directorate General Of Goods And Service Tax Intelligence, Jaipur, Union Of India, State Of Rajasthan, Intelligence Officer, Directorate General Of Goods And Services Tax Intelligence, Gurugram, Deputy Director, Directorate General Of Goods Tax Intelligence, Gurugram Assistant/deputy C....
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....oners; (ii) to allow the Writ Petition and award costs of this petition; (iii) for such further and other reliefs, as this Hon'ble Court may deem fit and proper in the nature and circumstances of the case. 2.4. D.B. Civil Writ 15420/2023 has been preferred with following prayer:- It is, therefore, most respectfully prayed that this Hon'ble Court may graciously be pleased to issue an appropriate writ of Mandamus or other appropriate writ/ order/ direction and kindly: a. Direct respondents to release INR 32,00,000/-, along with interest, which was seized from petitioners; b. Award and grant appropriate cost; c. Any other Order/ Relief to the petitioner as finds fit by this hon'ble court in the facts and circumstances of the present case. 2.5 D.B. Civil Writ 15125/2025 has been preferred with following prayer:- It is, therefore, most humbly and respectfully prayed that the Hon ble High Court may be pleased to issue appropriate Writ, Direction or Order and be pleased to: (a) direct the respondents to refund the illegally seized cash in name of Shri Chandra Prakash Goyal of Rs. 25,00,000/- ....
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....regard to the seizure of "money" during search, undertaken under Section 67 of CGST Act or RGST Act, 2017. 4. Submissions on Behalf of the Petitioners:- 4.1. Learned counsels for the petitioners have placed reliance upon the judgments in the cases of Kanishka Mata versus Union of India, 2020 (42) GSTL 52 (Madhya Pradesh High Court); Shabhu George versus State Tax Officer, (IB) 2023, 9 CENTEX 28, (Kerala High Court); Dhania Shreekumari versus State Tax Officer, 2023 (8) CENTEX 169, (High Court of Kerala); Deepak Khandelwal versus Commissioner of CGST, Delhi West, 2023 (9) CENTEX 244 (High Court of Delhi); Commissioner of CGST versus Deepak Khandelwal, 2024 (8) TMI 1041, SLP dismissed on 14.8.2024; Kunjan Bindal and another versus Commissioner of CGST, Delhi and others, W.P. (C) 8713/2023 (High Court of Delhi); Bharat Kumar Praveen Kumar and Company versus State of Gujarat, 2023 (12) CENTEX 63 (High Court of Gujarat); B. Kusuma Punacha versus Senior Intelligence Officer, 2024 (162) Taxman.com 414, (High Court of Karnataka); Pushpa Furniture Private Limited versus Union of India 2025 (181) Taxman.com 822; William E. Connor Associates and Sourcing Private Limited and another vers....
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....seize and confiscate the cash amount found during search proceedings, as the same is not within the domain under the CGST Act and not defined as "goods" by the legislature. He also submitted that a show cause notice (SCN) and further adoption of coercive means to pressurize the petitioners to deposit any amount is contrary to all settled propositions of law. He also referred the ratio laid down aforesaid said cases and submitted that the action of the respondents is contrary to the provisions of the CGST Act, 2017. 4.3. Learned counsel for the parties have referred to the aforesaid judgments of the Delhi High Court, the Kerala High Court, the Gujarat High Court, the Karnataka High Court, the Calcutta High Court and the Bombay High Court and submitted that six of the High Courts have considered these issues and categorically held that the respondents have no authority to seize cash (money) during search, as it is not legally permissible under Section 67(2) of the CGST Act, 2017. They also submitted that money has specifically been excluded from the definition of "goods" under Section 2(52) of the CGST Act, and the respondents or their authorized proper office are not authorized t....
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....ule of noscitur a sociis (interpretation of umabiguous words in the context with the word it has associated) cannot be used to colour an otherwise wide expression so as to whittle it down and stultify the object of a statutory provision. 6. Heard learned counsel for the parties and learned Additional Advocate General. Perused the material placed on record. We have considered all the judgments, as referred but for sake of brevity, we are not referring them in detail. 7. Statutory Scheme:- 7. Section 67 empowers the "proper officer", not below the rank of Joint Commissioner, for inspection, search and seizure. Section 67(2) of the Act of 2017 is reproduced as under:- 67(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 bo....
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....dian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property)," "(iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search: Provided that bullion, jewellery or other valuable article or thing, being stock-in-trade of the business, found as a result of such search shall not be seized but the authorised officer shall make a note or inventory of such stock-in-trade of the business;" 9.2. The provision under the Income Tax Act makes it clear that money, bullion, jewellery or other valuable articles are distinguished from the word "thing". It means, "thing" does not include money, bullion, jewellery or other valuable articles. 10. After considering the definition of "goods under the CGST Act," it is quite clear that the money and securities were excluded, herein we are only concerned with definition of the money while construing any provision, we have to consider the identical provisions of law which are enacted for the purpose of economic governance of the country, such as the Customs Act, 1962 and the ....
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....on of the goods. The Section 67(2) in clear terms provides that money and securities cannot be seized or confiscated by any of the authorities under the CGST Act or the RGST Act, 2017. 12. Rule of Interpretation Relied Upon by the Respondents 12.1 Learned counsel for the respondents and Additional AAG have placed reliance upon the rule of interpretation in the case of P. Mohanraj Vs. M/s Shah Brothers Ispat Private Limited (supra) and we are reproducing paragraph 22 as under:- 22. A reading of these judgments would show that ejusdem generis and noscitur a sociis, being rules as to the construction of statutes, cannot be exalted to nullify the plain meaning of words used in a statute if they are designedly used in a wide sense. Importantly, where a residuary phrase is used as a catch-all expression to take within its scope what may reasonably be comprehended by a provision, regard being had to its object and setting, noscitur a sociis cannot be used to colour an otherwise wide expression so as to whittle it down and stultify the object of a statutory provision. 12.2 A coordinate Bench of the Madhya Pradesh High Court, in the case of Shrimati Kanishka Matta versus U....
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....lusion cannot be included by way of interpretation of any other provision, unless specifically provided. 14.2. Nowhere in the definition clause under Section 2 of the CGST Act, 2017, the word "thing" has been defined, by the Legislature. It simply means the "things" means any other object other than money and securities. The legislature in its wisdom has specifically excluded "money and securities" from the power of the proper officer, thus the proper officer has no authority to seize money and securities under Section 67(2) of the CGST Act, while effecting search and seziure. 15. Consistent View of Various High Courts 15.1. These issues were already considered by a coordinate Bench of the Delhi High Court in the case of Deepak Khandelwal versus Commissioner of CGST, W.P. (C) 6738/2021, decided on 17.08.2023. A SLP filed by the Commissioner of CGST was dismissed by the Hon'ble Supreme Court on 14.08.2024, and a further review petition filed by the Commissioner of CGST was also dismissed on 19.08.2025. 15.2. The issue has been considered by the Hon'ble Supreme Court in the case of State Tax Officer, IB and Others v. Shabu George and Another, reported in 2023 (8) TMI 309,....
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....d seizure under Section 67(2) could not be utilised merely for the purpose of seizing cash or unaccounted wealth having no demonstrated connection with GST proceedings. 18. The said view assumes considerable significance inasmuch as the Special Leave Petition preferred by the Revenue Department against the said decision was dismissed by Hon'ble Supreme Court and the subsequent review petition was also dismissed. The same principle has thereafter been consistently followed in Commissioner of CGST Vs. Bhagwan Gupta (supra) where substantial cash was seized during a GST search, following Deepak Khandelwal (supra) directed release of the amount. The Revenue's challenge before the Supreme Court was also dismissed on 14.08.2024. 19. In State Tax Officer Vs. Shabu George (supra), the Kerala High Court directed release of cash seized during GST investigation where the cash did not constitute stock-in-trade of the business, and Hon'ble Supreme Court declined to interfere with the said decision. Likewise, in Dhanya Sreekumari Vs. State Tax Officer (supra), and T.H. Fazil Vs. State Tax Officer (supra), the Kerala High Court reiterated that cash which was not stock-in-trade an....
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....th interest. 24. In Krishija Optics Ltd. v. Commissioner, CGST (Delhi West) (supra) the Supreme Court, on 24.03.2025, dismissed the Revenue's Special Leave Petition while referring to its earlier order in Deepak Khandelwal (supra), and also dismissed the subsequent review petition. In Krishna Chaurasia v. Additional Director General, DGGI, (supra) the fact that the source of the cash was not satisfactorily explained was not treated, by itself, as sufficient justification for seizure under Section 67(2), of the CGST Act, 2017 and the cash was directed to be returned with accrued interest. The principle is further reinforced by Centre C Edtech Pvt. Ltd. v. Intelligence Officer, (supra), where the Kerala High Court held that cash could not be retained by either the GST Department or the Income Tax Department merely pending finalization of their respective proceedings and directed release of the amount while permitting the statutory proceedings to continue in accordance with law. 25. The release of the property does not prevent the Department from taking such action as may otherwise be permissible under the statute on the basis of independent and legally sustainable material. The....