Title: Deepak Khandelwal Proprietor v. Commissioner of CGST and Anr.
Decided on: 17th August, 2023
+ W.P.(C) 6739/2021
CORAM: HON’BLE MR JUSTICE VIBHU BAKHRU & HON’BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV
Introduction
The Delhi High Court, in a recent case, delved into the interpretation of Section 67 of the CGST Act, 2017, pertaining to the seizure of documents, books, and items during search operations. The court highlighted the legislative intent behind the provision and clarified the extent to which seizure can be carried out.
Facts
The petitioner, engaged in trading non-ferrous metals, faced a search operation at his residence under Section 67(2) of the CGST Act, resulting in the seizure of items, currency, and subsequent arrest. The petitioner sought the release of the seized assets, including two silver bars and mobile phones.
Analysis
The court analyzed the provisions of Section 67 of the CGST Act to discern its legislative intent. It noted that the power to seize items, books, or documents under Section 67(2) is solely for the purpose of examination, inquiry, or proceedings under the Act. The court emphasized that the intent is to uncover tax evasion and ensure taxable supplies are taxed. It clarified that the provision does not empower the seizure of currency or valuable assets solely based on unaccounted wealth.
Held
The court ruled that under Section 67(3) of the Act, items seized under Section 67(2) and not relied upon for issuing notices under the Act or its rules must be returned within thirty days of notice issuance. The court emphasized that the seizure provisions are not meant for recovering unaccounted wealth or tax evasion. Therefore, it directed the respondents to release the seized currency and valuable assets from the petitioner’s possession.
Conclusion
The Delhi High Court’s interpretation of Section 67 clarifies the boundaries of seizure powers under the CGST Act, emphasizing that the provision is not intended for seizing unaccounted wealth or assets. The court’s analysis reaffirms the legislative purpose and ensures that the scope of seizure remains aligned with its original intent.
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Written by- Ankit Kaushik
