Case Details: Smurti Waghdhare vs. Joint Director Directorate General of GST Intelligence [2026] 184 taxmann.com 243 (Bombay)
Judiciary and Counsel Details
- G. S. Kulkarni & Aarti Sathe, JJ.
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Abhishek Rastogi, Pooja Rastogi, Meenal Songire & Aarya More for the Petitioner.
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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 proceedings at multiple premises, including her office and residence. During the search, cash amounting to Rs. 1 crore was seized from her premises and her parents’ residence under seizure orders issued in Form GST INS-02. Parallel searches were also conducted at the premises of another person allegedly involved in fake ITC activities. The department justified the seizure on the basis of alleged involvement in a fake invoicing racket and contended that cash constituted a “thing” liable for seizure under Section 67(2) of the CGST Act. The petitioner challenged the seizure on the grounds that cash is not covered under the scope of Section 67(2), that no “reason to believe” was recorded, and that no notice was issued within six months as required under Section 67(7).
High Court Held
The High Court held that the seizure of cash was perverse, arbitrary and without authority of law. It observed that the mandatory requirement of recording “reason to believe” under Section 67(2) was not fulfilled and that cash was not shown to be relevant or necessary for any proceedings. The Court further held that non-issuance of notice within six months under Section 67(7) vitiated the seizure and mandated return of the seized amount. It was also noted that the ownership of cash was established in favour of the petitioner and that there was no power under the CGST Act to transfer such seized cash to the Income Tax Department. Accordingly, the seizure orders were quashed, and the respondents were directed to release the cash along with applicable interest.
List of Cases Referred to
- ITO v. Lakhmani Meval Das [Civil Appeal No. 2526 of 1972, dated 30-3-1976] (para 11).
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