The Supreme Court is set to address whether authorities have the power to seize “cash” under Section 67 of the Central Goods and Services Tax (CGST) Act, 2017, following conflicting rulings by the Delhi High Court and the Madhya Pradesh High Court. Recently, a bench comprising Justices PS Narasimha and Sandeep Mehta issued notice on a petition filed by tax authorities challenging a Delhi High Court order directing the refund of seized cash to the respondents.
The case involves a search conducted by the petitioner-authorities at the respondents’ residence under Section 67 of the CGST Act. During the search, cash amounting to Rs. 1,15,00,000 was found, which the respondents could not satisfactorily account for, leading to its seizure. The respondents sought the release of the cash, but their request was denied.
Subsequently, the respondents approached the Delhi High Court, arguing that authorities lacked the power under Section 67 of the CGST Act to seize cash merely because it was not satisfactorily explained. The Court, citing its earlier rulings in Deepak Khandelwal Proprietor M/s Shri Shyam Metal v. Commissioner of CGST, Delhi West & Anr. and Rajeev Chhatwal v. Commissioner of Goods and Services Tax (East), ruled in favor of the respondents and ordered the return of the seized cash.
Challenging this decision, the petitioner-authorities approached the Supreme Court, contending that there are divergent judicial opinions on whether cash can be seized under Section 67. While the Delhi High Court has ruled against the seizure of cash, the Madhya Pradesh High Court has held a contrary view, stating that cash can indeed be seized.
In light of these conflicting judgments, the Supreme Court has issued notice in the case.
For reference, Section 67 of the CGST Act empowers authorities to search and seize goods, documents, books, or things deemed relevant to proceedings under the Act. However, it does not explicitly address the seizure of cash.
The case is titled Commissioner of CGST Delhi West & Ors. v. Gunjan Bindal & Anr., Diary No. 44061/2024.