Cash cannot be during the search – Supreme Court

SC: Dismisses Revenue’s SLP against HC order allowing release of cash seized during search

SC dismisses Revenue’s SLP filed against Kerala High Court’s order directing the Department to release the cash seized during the search since, such cash does not form part of stock in trade or business

Earlier the Kerala HC held that the seizure of cash from the premises of the Assessee at the time of investigation by GST authorities as wholly uncalled for and unwarranted, directs release of the same without any delay and at any rate within a week; Note that writ appeal was filed against the learned Single Judge’s order rejecting  the Assessee’s contention that the seizure of cash was unwarranted especially when the investigation itself was for alleged evasion of tax due; Determines that during the pendency of this writ appeal, the Intelligence Officer disposed the representation preferred by the Assessee as per the directions of the learned Single Judge holding that in view of the specific provisions of Section 67(2) of the CGST Act, which authorises the seizure of ‘things’, which inter alia includes cash, the authority was justified in seizing the cash and retaining the same pending a culmination of the investigation; Puzzled by such a stance of the Intelligence Officer, HC stresses that while it may be a fact that Section 67(2) of the CGST Act authorizes the seizure of things, including cash in appropriate cases, however, the present  case is not the one that called for a seizure of the cash found in the premises of the Assessee at the time of the search; HC explains that the power of any authority to seize any ‘thing’ while functioning under the provisions of a taxing statute must be guided and informed in its exercise by the object of the statute concerned and in an investigation aimed at detecting tax evasion under the GST Act, “we fail to see how cash can be seized especially when it is the admitted case that the cash did not form part of the stock in trade of the appellant’s business”; Referring to the order of the Intelligent Officer, HC calls out that it reveals the extent to which authorities under the Act are misinformed of their powers and the limits of their jurisdiction; Moreover, apprises that as the Authorities have retained the seized cash for more than six months and is yet to issue SCN, there can be no justification for a continued retention of the said amount with them