T.H. Fazil Vs State Tax Officer
Date: September 17, 2023
Court: High Court
Bench: Kerala
Type: Writ Petition
Subject Matter
Revenue directed to release the seized cash
Summary
The case involves a writ petition filed under Article 226 of the Constitution of India challenging the seizure of cash from the premises of the petitioner by the GST authorities. The petitioners argued that the GST authorities do not have the power under the Act and Rules to seize cash that is not 'stock in trade'. The petitioners also relied on a previous decision of the Kerala High Court. The learned Government Pleader did not dispute the legal position as contended by the petitioners, and it was noted that the cash seized included currency that would cease circulation by a certain date. The Division Bench of the Court, in a previous similar case, ordered the release of the seized cash. The State's appeal against the judgment was dismissed by the Supreme Court. As a result, the present writ petition was allowed, and the respondents were directed to release the seized cash and credit the same to the account of the petitioners within a period of five days from the date of the judgment. 3. Suggested title for the case law: "Release of Seized Cash by GST Authorities: Landmark Judgment"
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The present writ petition has been filed under Article 226 of the Constitution of India questioning the seizure of cash from the premises of the petitioner vide Exhibits P1 and P2 seizure memos dated 22.12.2020. An amount of Rs.31,50,000/- and Rs.3,40,000/- was seized from the petitioner Nos. 1 and 4 respectively.
2. The learned counsel for the petitioners submits that the GST authorities have no power under the Act and the Rules thereto to seize the cash of a dealer, in as much as the cash seized is not ‘stock in trade’. The learned counsel for the petitioner has also placed reliance on the decision in Shabu George & another v. State Tax Officer (IB) State Goods & Services Tax Department and others [2023 (4) TMI 252-Kerala High Court].
3. The learned Government Pleader does not dispute the legal position as contended by the learned counsel for the petitioners. The cash was seized from the petitioners’ premises on 22.12.2020. The cash seized from the petitioners’ premises includes the currency of denomination of Rs.2000/- and the same would cease circulation by the end of September, 2023. The Division Bench of this Court in Shabu George (supra) has held as follows:
“3…
Moreover, as the respondent has retained the seized cash for more than six months and is yet to issue a show cause notice to the appellants in connection with the investigation, there can be no justification for a continued retention of the said amount with the respondent. We therefore, allow this appeal by directing the first respondent to forthwith release to the appellant the cash seized from the premises, against a receipt to be obtained from him. The amount shall be released to the appellant without any delay, and at any rate, within a week from the date of receipt of a copy of this judgment.
The writ appeal is allowed as above.”
4. Against the said judgment, the State had preferred an SLP before the Supreme Court and the same was dismissed. Considering the aforesaid facts and the law, the present writ petition is allowed and the respondents are directed to release the cash seized from the petitioners and credit the same to the account of the petitioners within a period of five days from today.