In W.P. (C) 7618/2019 -DEL HC- Delhi High Court orders GST department to release seized cash of INR 50.7 lakh with accrued interest to M/s. Goyal Metal Udyog
Justice Vibhu Bakhru & Justice Amit Mahajan [22-08-2023]

Read Order: M/s. Goyal Metal Udyog V. Commissioner of Central Goods & Services Tax & Anr

Chahat Varma

New Delhi, September 25, 2023: The Delhi High Court has ordered the GST Department to release the seized cash of Rs. 50.7 lakh to M/s. Goyal Metal Udyog (petitioner).

In the case at hand, the petitioner's business premises were subject to a search by officers from the Anti-Evasion Branch of the Central Goods and Service Tax, Delhi East Commissionerate. During this search, the officers examined the stocks of raw materials and finished goods, which were found to be properly documented in the company's books of accounts. However, the search also led to the discovery of Indian currency amounting to Rs. 50.7 lakh in a locker on the premises. This cash was subsequently seized by the authorities. The petitioner claimed that they were instructed by the authorities to deposit a sum of money, which would cover potential tax, interest, and penalty liabilities if the seized cash was determined to be proceeds from undisclosed sales. Although the petitioner states that no such amount was actually owed, they complied with this request and deposited the specified amount, with the understanding that the seized cash would be returned. However, despite repeated requests made by the petitioner, the GST Department has not taken any steps to release the seized cash.

The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan acknowledged that the power under Section 67(2) of the Central Goods and Services Tax Act, has already been addressed in favour of the petitioner by a recent decision of the court in the case of Deepak Khandelwal Proprietor M/s Shri Shyam Metal v. Commissioner of CGST, Delhi West & Anr. [LQ/DelHC/2023/4774].

Thus, the bench ruled that the currency seized was required to be released to the petitioner.

Regarding the petitioner's request to adjust Rs. 11,41,750 against future liabilities, the bench noted that this amount had been voluntarily deposited. Therefore, the bench clarified that the GST department was not prevented from taking any actions concerning this deposited sum, and the petitioner was also not restricted from filing an appropriate application for a refund of the said amount, if otherwise due.

With the above observations, the GST department was directed to remit the proceeds of the fixed deposit, along with any accrued interest, to the petitioner's bank account.