Case Details: Smurti Waghdhare vs. Joint Director, Directorate General of GST Intelligence, Mumbai (2026) 40 Centax 256 (Bom.)
Judiciary and Counsel Details
- Aarti Sathe & G.S. Kulkarni, JJ.
- S/Shri Abhishek Rastogi, Pooja Rastogi, Meenal Songire & Aarya More, for the Petitioner.
- S/Shri Jitendra Mishra, Sangeeta Yadav, Rupesh Dubey & Ashutosh Mishra, for the Respondent.
Facts of the Case
The petitioner, a GST-registered proprietor engaged in trading of metals and scrap, was subjected to search operations conducted by the department at business as well as residential premises. During the course of such a search, various items, including cash belonging to the petitioner, were seized, and similar search proceedings were also carried out at the premises of another individual located in the same building. The department subsequently handed over the seized cash to the Income Tax authorities and initiated proceedings against both individuals, while the petitioner asserted that there was no relationship warranting such linkage. The petitioner contended that the seizure of cash was not supported by any provision under the CGST Act and that the statutory requirements governing such action were not complied with. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that the power of seizure under Section 67 is conditional upon the formation of a valid ‘reason to believe’ that the goods or things are liable to confiscation or are relevant to proceedings, and such reasons must be duly recorded. It was observed that in the absence of any recorded reasons, the seizure of cash was perverse and could not be sustained in law. The Court further held that non-compliance with the statutory requirement of issuance of notice within the prescribed time frame vitiated the action of the department and rendered the continued retention of seized cash unlawful. It was also noted that there was no enabling provision under the CGST Act permitting the transfer of seized cash to the Income Tax authorities. Accordingly, the impugned seizure was set aside, and directions were issued for the release of the cash to the petitioner along with applicable interest.
List of Cases Cited
- ITO v. Lakhmani Meval Das — Civil Appeal No. 2526 of 1972, dated 30-3-1976 — Referred [Para 11]
