GST Authorities not Empowered to Seize Cash Unless it is Stock-In-Trade | HC
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- Last Updated on 7 October, 2023
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Case Details: T. H. Fazil v. State Tax Officer - [2023] 155 taxmann.com 93 (Kerala)
Judiciary and Counsel Details
- Dinesh Kumar Singh, J.
- A. Kumar, P.J. Anilkumar, G. Mini & P.S. Sree Prasad for the Petitioner.
- Smt Jasmine M.M., Govt. Pleader for the Respondent.
Facts of the Case
The petitioner filed a writ petition challenging the seizure of cash from its premises by the GST authorities. The cash was seized from the petitioner premises on 22-12-2020 and includes currency in denomination of Rs 2000/-.
The petitioner argued that the GST authorities lack the legal authority under the GST Law to seize a dealer’s cash, especially when the seized cash does not qualify as ‘stock in trade’. The petitioner cited the precedent of Shabu George v State Tax Officer [2023] 153 taxmann.com 46 (Kerala) to support their argument. In this case it was held that in an investigation aimed at detecting tax evasion under GST Act, cash cannot be seized, especially when cash does not form part of stock-in-trade of business. Furthermore, it was noted that the respondent had retained the seized cash for over six months without issuing a show cause notice to the appellants, making the continued retention unjustifiable. This ruling was subsequently upheld by the Hon’ble Supreme Court of India.
High Court Held
In light of these legal precedents, the writ petition is allowed. The High Court directed the tax authorities to release the cash seized from the petitioners’ premises and credit the same to the petitioners’ account.
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