Facts of the Case

The petitioner, a proprietor engaged in trading of non-ferrous metals, was subjected to a search operation conducted at his residential premises on 28.01.2020 under Section 67(2) of the CGST Act. During the search, authorities seized silver bars (approximately 44 kgs), ₹7,00,000/- in cash, mobile phones, and various documents.

Subsequently, the petitioner was arrested under Section 132 of the Act and later released on bail. A show cause notice under Section 74 was issued proposing tax demand; however, it did not rely on the seized goods or cash.

Despite lapse of more than one year and no specific notice regarding confiscation, the seized items were not returned, leading to the filing of the writ petition.

Issues Involved

  1. Whether cash (Indian currency) can be seized under Section 67 of the CGST Act.
  2. Whether silver bars qualify as “goods” liable for confiscation under the Act.
  3. Whether the term “things” under Section 67(2) includes cash and valuable assets.
  4. Whether failure to issue notice within six months mandates return of seized goods.
  5. Whether seizure powers under GST extend to unaccounted wealth.

Petitioner’s Arguments

  • Cash is not “goods” under Section 2(52) and cannot be seized under Section 67.
  • The term “things” must be interpreted ejusdem generis with “documents” and “books,” thus excluding currency.
  • No notice for confiscation was issued within six months; hence goods must be returned.
  • Seizure powers are limited to goods liable for confiscation and material relevant to proceedings.
  • Reliance placed on judicial precedents including I.J. Rao v. Bibhuti Bhushan Bagh.

Respondent’s Arguments

  • Cash and silver bars were seized as “things” and not strictly as “goods.”
  • The term “things” should be interpreted broadly to include money and assets.
  • Silver bars were argued to fall under “securities,” thus outside “goods.”
  • Reliance placed on Kanishka Matta v. Union of India to justify wider interpretation.

Court Findings / Order

The Delhi High Court allowed the petition and held:

  • Silver bars qualify as “goods”, and are not “securities.”
  • Cash (Indian currency) is excluded from “goods”, being “money.”
  • The term “things” must be read ejusdem generis with documents/books and cannot include cash or valuable assets.
  • Section 67 is not a recovery provision, but only for investigation and prevention of tax evasion.
  • Seizure of assets merely because they are “unaccounted” is beyond GST powers and falls under income tax jurisdiction.
  • Since no notice relied on seized items, they must be returned under Section 67(3).

Final Direction

Authorities were directed to immediately release cash and silver bars seized from the petitioner.

Important Clarifications by Court

  • Section 67 powers are restrictive and cannot be exercised arbitrarily.
  • “Things” includes only items carrying informational or evidentiary value (e.g., devices, records).
  • GST authorities cannot seize assets to secure revenue or recover tax.
  • Unaccounted wealth issues fall within the Income Tax Act domain.
  • Even if seizure were valid, non-reliance in notice mandates return.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/VIB17082023CW67392021_194711.pdf

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