Cash and silver should not be seized during investigation: Delhi High Court

- Sales Tax - Soham Mashruwala

There is a provision for inspection and redundancies under the GST Act. Further, a provision has been made regarding what the officer can seize. The officials of the account are bold and try to take everything recklessly but do not consider the limit under the law. A very noble judgment of the Delhi High Court in this regard Deepak Khandelwal Proprietor Shri Shyam Metal Vs. Commissioner of CGST (WPC 6739/2021 dated 17.8.2023) which is discussed in today's article.

The facts of the case

The petitioner was raided by the Government and an investigation was conducted under Section 67(2). The business of the petitioner was fair sale of non-ferrous metal.

According to the investigation, silver bars (about 34 kg) of the petitioner, Rs. 7 lakhs in cash, 4 mobile phones, sales books, check books of various bank accounts, and accounting books were seized. A case was also registered against the petitioner and he was also granted bail. According to the account, all these properties received from the proceeds of the bogus bill transactions are subject to forfeiture. Further, on 10.11.2020, the Government issued a show cause notice under Section 74 as the total amount of Rs. 24,20,900 was written to be recovered. Petitioner wrote a letter dated 23.3.2021 requesting that nothing was done by the account thereafter to return the silver bars, cash and document due to which a writ was filed before the Delhi High Court.

Petitioner's contention

It was contended by the petitioner that even after the lapse of 6 months since the seizure of the account, no notice has been sent.

It was contended by the petitioner that silver bars, cash cannot be seized under Section 67 and no notice has been issued for the same. Section 67 is a machinery provision and cannot be recovered by using it. There is section 79 for recovery and section 83 for levy. For this, silver bars (wood) and cash amount have to be returned.

Judgment of Delhi High Court

The Delhi High Court specifically noted that the account did not have any evidence that the silver bars were for the purpose of paying bogus bills. Further, the account has no authority to confiscate cash and silver bars under the Income Tax Act dealing with unaccounted money and no concrete reason has been written in any notice so far.