GST Authorities Have No Power To Seal Cash During Search: Calcutta High Court Orders De-Sealing Of ₹24 Lakh

The Calcutta High Court held that the GST authorities do not have the power under Section 67 of the CGST Act to seal or seize cash. Accordingly, the bench directed the immediate de-sealing of Rs. 24 lakhs. Section 67 of the Central Goods and Services Tax (CGST) Act, 2017, grants tax authorities the powers of inspection, search, and seizure to prevent tax evasion and ensure compliance. Justice Om Narayan Rai examined whether the GST authorities have the power to seize cash under Section 67(2) of the CGST Act. In the case at hand, the search proceedings were conducted at the office and residential premises of the assessee/petitioner under Section 67 of the CGST Act. During the search, cash amounting to Rs. 24 Lacs was sealed by the GST authorities, thereby depriving the assessee of his right to use the same. The counsel for the assessee submitted that the entire proceeding has been conducted de hors the provisions of law. The INS-01 issued by the department does not disclose any reason to believe which could form the basis of the search and seizure proceeding. The department argued that the GST authorities have rightly seized the cash, and in any case the cash is still in the custody of the assessee. The department further submitted that since retention of cash to the tune of Rs. 24 lacs were found by the GST authorities to be suspicious, the GST authorities had already intimated the Income Tax authority about the same, and as such, their action in sealing the assessee's cash cannot be faulted. The bench referred to Section 67(2) of the CGST Act and noted that the GST authorities can seize goods or documents or books or things if they have reasons to believe that such goods or documents or books or things shall be useful or relevant to any proceeding under this Act and have been secreted in any place. The Bench further referred to Section 2(52) of the CGST Act and observed that the said definition clearly reveals that money stands excluded from the purview of goods. The bench found that the action of the GST authorities in seizing cash and sealing the same in the custody of the assessee is beyond the power domain of the GST authorities. The bench directed the GST authorities to immediately de-seal the said amount of Rs. 24 lacs. …….This order shall not be treated as a passport by the petitioner to bypass any action that can be taken against the petitioner if retention or possession of the said cash by the petitioners is otherwise found to be illegal, clarified the bench. Regarding the issue of the validity of the search and seizure proceeding, the bench directed the GST authorities to file an affidavit within four weeks. In view of the above, the bench directed the GST authorities to continue the investigation and pass a final order, but they shall not communicate or upload such on the GST portal without permission of the Court. Case Title: Puspa Furniture Ltd. & Anr. v. Union of India & Ors. Case Number: WPA 19155 of 2025 Counsel for Petitioner/Assessee: Himangshu Kumar Ray, Subhasis Podder, Sushant Bagaria, Gaurav Chakraborty, Animitra Roy Counsel for Respondent/Department: Hasi Saha, N. Chatterjee, Tanoy Chakraborty, S. Sanyal Click Here To Read/Download Order

GST Authorities Have No Power To Seal Cash During Search: Calcutta High Court Orders De-Sealing Of ₹24 Lakh

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