The Delhi High Court ruled that there is no provision in the GST Act that would allow for the forcible removal of currency from the premises of any person.
The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the powers of search and seizure are draconian powers and must be exercised strictly in terms of the statute and only if the necessary conditions are satisfied.
The petitioner/assessee has challenged the search operation as unlawful. The petitioner contended that the concerned officers could have no reason to believe that any goods liable for confiscation were lying on the petitioners' premises. The officers had no reason to believe that any records relevant to the proceedings would be available on the premises.
The petitioner contended that the GST officers had no power to seize any cash in the exercise of their powers under Section 67(2) of the GST Act. The power under Section 67(2) of the GST Act to seize goods could be exercised only if the goods were liable for confiscation. The documents, books, or things could be seized only if they are useful or relevant to any proceedings under the GST Act.
The petitioner urged that currency is excluded from the definition of goods and thus cannot be seized as goods. The currency is also not useful or relevant for conducting any proceedings, and therefore, there is no question of seizing currency in the exercise of Section 67(2) of the GST Act.
The department contended that the officers had merely "resumed" cash. Therefore, it cannot be considered a seizure.
The court noted that the department was unable to point out any provision in the GST Act that entitles any officer of GST to merely "resume" assets. Clearly, the petitioners had not handed over the cash to the concerned officers voluntarily. The action taken by the officers was coercive.
"The action of the officers in dispossessing the petitioners of their currency is concerning; it is clear that the said action of taking away currency was illegal and without any authority of law," the court said.
Case Title: Arvind Goyal CA Versus UOI
Citation: W.P.(C) 12499/2021
Counsel For Petitioner: J.K. Mittal, Vandana Mittal, Aashna Suri, Vasu P. Jain
Counsel For Respondent: Senior Panel Counsel Nidhi Banga with Advocate Nishant Kumar