GST Officers Can’t Seize Cash In Search & Survey: Delhi High Court

CASE TITLE: M/S. GOYAL METAL UDYOG V/S COMMISSIONER OF CENTRAL GOODS & SERVICES TAX

The person who filed the case says that when the officials searched the place, they checked the materials and products in stock. They saw that everything was properly recorded in the company's books. But, they also found Rs. 50,70,000/- in Indian currency inside a locker during the search.

The person filing the case says that the money found during the search belonged to their family members. They moved from their home to the business place because their house was being renovated, and there were many workers there.

Then, they received a summons under Section 70 of the Central Goods and Services Tax Act, 2017. It asked them to provide various documents, like sales and purchase records for the last five years, bank account statements for the last five years, and information about other related companies, along with their sales and purchase records.

The cash found at their place was put in a bank account by the authorities, under the name of the Commissioner, CGST, Delhi. 

The person kept asking the authorities to give back the cash and the original documents, but they did not return the money.

The person bringing the case explains that the authorities asked them to pay Rs. 11,41,750/- as tax, interest, and penalty. This request is made because the authorities claim the seized cash was from undisclosed sales. 

Even though the person disagreed and didn't think they owed this amount, they still paid it on November 23, 2018. They did this because they were promised that the seized cash would be returned.

The person asked the authorities many times to give back the seized cash, but they didn't do anything about it. They even wrote a letter on May 24, 2019, asking again, but the authorities didn't respond positively.

The person bringing the case believes that taking their cash was against the law. They argue that the authorities had no right to take the cash just because they suspected it wasn't accounted for properly.

The person is asking the court to give them back the seized cash and also use the tax, penalty, and interest they paid as credit for their future tax liabilities.

The court has decided that the seized currency should be returned to the person.

Also Read: 30-Day Time Limit For Reporting Invoices on E-Invoice Portal Effective From November 1st