In a recent case involving two brothers, the GST (Goods and Services Tax) department conducted a search, also known as a chhapa, on their residence. During the search operation, GST officers discovered a substantial amount of cash amounting to 1 crore and 15 lakh rupees. The officers, as part of their duty, questioned the brothers about the source of the cash.
However, the two brothers were unable to provide a satisfactory explanation regarding the origin of the cash. In response, the GST officers exercised their authority and seized the cash from the premises. Despite the brothers’ subsequent requests for the return of the money, the GST department declined to comply with their demands.
The legal contention arose when the brothers decided to challenge the actions of the GST officers in the High Court. They argued that Section 67 of the GST Act, which pertains to the search and seizure provisions, did not empower the officers to confiscate cash during such operations. According to the brothers, the authority granted by Section 67 was limited to the seizure of documents or registers, not physical currency.
After careful consideration of the arguments presented by both parties, the High Court judge ruled in favour of the two brothers. The judge concluded that the GST officers had exceeded their authority by confiscating cash during the search and seizure operation, as per the provisions outlined in Section 67 of the GST Act.
As a consequence of the court’s decision, the GST department was directed to return the seized money to the two brothers within a specified timeframe. Furthermore, the court ordered the GST department to compensate the brothers with interest on the seized amount. The decision emphasized the importance of adhering to the statutory limitations imposed on the powers of GST officers during search and seizure operations.