The Delhi High Court has held that cash can’t be seized by GST officers in search & survey.

The petitioner claims that during the search, the concerned officers examined the stocks of raw material and finished goods and found that the same were duly recorded in the books of accounts and record. However, during the search, the Officers also found Indian currency amounting to ₹50,70,000/-, which was lying in a locker.

According to the petitioner, the same belonged to the family members of the petitioner. It was brought from the residential premises to the business premises as their residential house was under renovation and there were large number of labourers working in the premises.

The summons under Section 70 of the of the Central Goods and Services Tax Act, 2017 was issued, calling upon the petitioner to produce various documents including all documents relating to sales and purchases effected during the preceding five years; the statement of bank account for the preceding five years; and the details of all other related companies along with documents relating to sales and purchases.

The cash seized from the premises of the petitioner was deposited by the respondent with Syndicate Bank in the name of the Commissioner, CGST, Delhi.

The petitioner continued to pursue the respondent for the release of the said cash and original documents, however, the cash so seized was not released.

The petitioner states that he was called upon by the respondents to deposit tax, interest and penalty, amounting to ₹11,41,750/- which would be payable in the event, the cash seized represented proceeds of undisclosed sales. It is claimed that although no such amount was payable, he deposited the said amount on 23.11.2018, on the assurance that the cash seized, would be released.

The petitioner requested the respondents to release the amount of cash seized. But his requests were in vain and no steps in this regard were taken by the respondents.
The petitioner issued another letter dated 24.05.2019, reiterating his request. But the respondents dis not accede to the said request.

It is the petitioner’s case that seizure of cash is illegal and the respondents had no power to seize cash on the suspicion that it was unaccounted cash.

The petitioner has prayed for release of the cash so seized as well as for adjusting the amount of tax, penalty and interest deposited against its future liability.

The court said that the currency seized is required to be released to the petitioner.