Cash amount cannot be Seized by Department without giving Notice1
The officer is not allowed to seize the cash balance of a taxpayer without following the provision of the GST Act.
In the given case department seized the cash balance of the taxpayer without adhering to the provision of the law. The department neither issued any notice to the taxpayer with regard to seizure of cash balance nor mentionedany reasonfor seizure of cash balance.
Aggrieved by the action of the department taxpayer filed a writ before the Hon'ble Delhi High Court seeking relief.
It is contended that the department was required to issue notice with regard to seizure of cash balance as per the provision of CGST Act. The relevant provision is reproduced below for reference:
As per the Section 67(7) of the CGST Act, 2017where the any goods under sub-section2 of section 67 seized and no notice in respect of such seizure is given within six months than the goods shall be returned to the person from whose possession they were seized.
Provided that the period of such six months may, on sufficient cause being shown, be extended by the proper officer for a further period of six months.
Petitioner also stated that cash is not included in the expression of goods. As per section 2(52) of the CGST Act,2017 the term 'Goods' means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply.
As per the above-mentioned provision it was contended that department required to issue the notice within six months but more than 12 months have passed since the date of seizure but no notices were issued so the department is duty-bound to return the seized cash along with required interest.
As per the above-mentioned facts Hon'ble High Court directed that respondent/revenue authority to issue notice to the petitioner in accordance with the provision of GST law.Further the contention of the petitioner was considered that more than 12 months have passed since the date of seizure, and therefore, the respondent/revenue was duty-bound to return the seized cash along with interest.
In this regard the respondent was directed to file counter affidavit before the next hearing. The matter is pending before the court and is listed for next hearing on 19.07.2021.
1 RAJEEV CHHATWAL Vs COMMISSIONER OF GOODS AND SERVICES TAX EAST-3 (2021-TIOL-1323-HC-DEL-GST)