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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, Purushaindra Kumar Kaurav, JJ.
Deepak Khandelwal Proprietor M/s Shri Shyam Metal – Appellant
Versus
Commissioner of CGST, Delhi West & Anr. – Respondents
W.P.(C) 6739 of 2021
Decided On : 17-08-2023
Seizure - Goods and Currency - Central Goods and Services Tax Act, 2017 - Section 67
Fact of the Case:
The petitioner, a trader in non-ferrous metals, sought the release of seized silver bars, Indian currency, and mobile phones, alleging illegal seizure from his residence during a search conducted under Section 67 of the Act. The petitioner was also arrested and received a notice proposing a demand of Rs.24,20,900, including a penalty of Rs.12,10,450. The petitioner contended that the proper officer did not have the power to seize currency and that the seized goods were liable to be returned as no notice was issued within six months of seizure. The petitioner filed a writ petition under Article 226/227 of the Constitution of India, seeking the release of his goods.
Finding of the Court:
The court analyzed the provisions of Section 67 of the Act and held that the power to seize goods is limited to those liable for confiscation and that the purpose of the provision is to unearth tax evasion. The court emphasized that the power of seizure is not for recovery of tax but to ensure compliance and aid proceedings against tax evasion. The court concluded that the seized currency and valuable assets were not liable for confiscation under Section 67 and directed the respondents to release the seized items. The court clarified that the respondents could continue proceedings under the Act in accordance with the law.
Issues: The main issue was whether the proper officer had the power to seize currency and valuable assets under Section 67 of the Act, and whether the seized goods were liable to be returned as no notice was issued within six months of seizure.
Ratio Decidendi: The court interpreted Section 67 of the Act, emphasizing that the power of seizure is not for recovery of tax but to ensure compliance and aid proceedings against tax evasion. The court held that the power to seize goods is limited to those liable for confiscation and that the purpose of the provision is to unearth tax evasion. The court concluded that the seized currency and valuable assets were not liable for confiscation under Section 67 and directed the respondents to release the seized items.
Final Decision: The petition was allowed, and the respondents were directed to release the currency and other valuable assets seized from the petitioner. The court clarified that the respondents could continue proceedings under the Act in accordance with the law.
JUDGMENT
Vibhu Bakhru, J. The petitioner has filed the present petition, inter alia, praying that directions be issued to the respondents to unconditionally release the two silver bars (weighing 29.5 Kgs. and 14.5 Kgs. respectively); Rs.7,00,000/- Indian currency; and, Mobile Phones, which were seized by the respondents from the residential premises of the petitioner. The petitioner also prays that the search of his residential premises and seizure effected, be declared illegal.
Factual Context
2. The petitioner carries on business of trading in non-ferrous metals, inter alia, in the name of his sole proprietorship concern, Shri Shyam Metal. He is registered under the Central Goods and Services Tax Act, 2017 (hereafter `the Act') under the registration: GSTIN07AGCPK1126B2Z5.
3. On 28.01.2020, a search was conducted at the petitioner's residence, House No. 3-4, Pocket 6, Sector-24, Rohini, Delhi, under Sub-section (2) of Section 67 of the Act. During the aforementioned operations, certain items and currency were seized from the ground floor of the petitioner's residence. The relevant extract of the order of seizure (Form GST INS-02) listing out the goods and items seized by the respondent authorities, is reproduced hereinbelow:
"A) Details of goods seized:
| Sr No. | Description of Goods | Quantity/Units | Make/Mark or Model | Remark |
| 01 | Silver Bar | Silver Bar 29872 (29.5 kgs) | 2017 | |
| 02 | Silver Bar | Silver Bar 14948(14.5 kgs) | 2018 |
B) Details of Books/Documents/things seized:
| Sr. No. | Description of books/documents/Equipments things seized | Page No. |
| 1. | Sale Bill Book | 251-300 |
| 2. | Axis Bank Cheque Book 917020084690138 | 125593-125605 |
| 3. | PNB Cheque Book 0155002106140506 | 260829-260920 |
| 4. | PNB Cheque Book 0155002106140506 | 610455-610460 |
| 5. | PNB Cheque Book 0617000100149333 | 705753-705770 |
| 6. | PNB Cheque Book 0617000100292510 | 929211-929250 |
| 7. | PNB Cheque Book 6582002100002424 | 034980-034990 |
| 8. | Green Colour Saraswati Note Book | 01-01(Written Page) |
| 9. | Red Colour Redmi 6A Mobile | IMEI 1 No.: 869956041874739 IMEI 2 No.: 869956041874747 |
| 10. | Blue Colour Redmi 6A Mobile | IMEI 1 No.: 869956048349958 IMEI 2 No.: 869956048349966 |
| 11. | One Plus Brand Mobile | IMEI 1 No.: 99001345485110 IMEI 2 No.: 869430049682205 |
| 12. | IPhone 11 Pro IMEI 1 No.: 353844103083170 | IMEI 2 No.: 353844103043356 |
| 13. | CASH INDIAN Currency | 7 Lakh (10*50*100+50*50*100+ 500*4*100+2000*1*100) |
| 14. | Kachha Parchi | Yellow Packet |
| 15. | Stamps | M/s. Nitin Metal, M/s. Adi Shree, M/s. Shree Ganesh Trading Co.," |
"
4. Thereafter on 29.01.2020, the petitioner was arrested by the Central Tax Officers of GST Commissionerate, North Delhi, as it was alleged that he had committed offences, punishable under Clause (i) of Sub-section (1) of Section 132 of the Act. The petitioner was released on bail on 21.03.2020 by the learned Chief Metropolitan Magistrate, Patiala House Courts, New Delhi.
5. The Sales Tax Officer Class II/AVATO, Ward 30: Zone 1: Delhi (Delhi State GST Officer) issued a notice under Section 74 of the Act on 10.11.2020 proposing a demand of Rs.24,20,900/- including penalty of a sum of Rs.12,10,450/-. The petitioner responded to the said notice by his letter dated 16.11.2020. The petitioner contended that, no reliance was placed on any of the documents, Indian currency, or any other items which were seized on 28.01.2020, as detailed in the seizure report, in the said notice.
6. The petitioner, by letter dated 23.03.2021, requested the Additional Commissioner, Central Tax GST, West Delhi, to release the goods, documents and cash seized from his premise on 28.01.2020. The petitioner contended that even if the proviso to Subsection (7) of Section 67 of the Act was applicable, no notice was issued with respect to the seizure of goods, within a period of six months from the date of seizure. Therefore, the seized goods were liable to be restored.
7. The petitioner has filed the present petition under Article 226/227 of the Constitution of India, being aggrieved by the failure on the part of the respondents to release his goods even after lapse of one year from the date of the seizure
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