Case Note & Summary
The petitioners, B. Kusuma Poonacha and J K Manjunath, filed a writ petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka at Bengaluru. The first petitioner was an employee working as Operations Coordinator of M/s. Vihaan Direct Selling (India) Pvt. Ltd. On 20.09.2022, the first respondent, Senior Intelligence Officer of the Directorate General of GST Intelligence (DGGI), Bangalore Zonal Unit, conducted a search of her residential premises under Section 67(2) of the Central Goods and Services Tax Act, 2017 (CGST Act). During the search, various goods, electronic devices, and cash amounting to Rs.1,71,07,500/- were seized, and a seizure order in Form GST INS-02 was issued on 21.09.2022. The petitioners sought quashing of the seizure order insofar as it related to the cash and a consequential direction to refund the cash. The court heard Sri. V. Raghuraman, learned Senior Counsel for the petitioners, and Sri. Vanita K.R., learned counsel for the respondents. The court examined the provisions of Section 67(2) of the CGST Act, which requires that seizure of goods, documents, or things during a search must be done with prior authorization from specified officers and that reasons for seizure must be recorded. The court found that the impugned seizure order did not comply with these mandatory requirements, as it was not authorized by the proper officer and did not record reasons. Consequently, the court held that the seizure was invalid and liable to be quashed. The court allowed the petition, quashed the seizure order dated 21.09.2022 in respect of the cash, and directed the respondents to refund the seized cash of Rs.1,71,07,500/- to the petitioners within four weeks.
Headnote
A) Constitutional Law - Writ Jurisdiction - Articles 226 and 227 of the Constitution of India - Quashing of Seizure Order - Petitioners sought quashing of seizure order dated 21.09.2022 and refund of cash seized - Court held that seizure under Section 67(2) of CGST Act requires prior authorization from specified officers and recording of reasons - Non-compliance renders seizure invalid - Held that impugned seizure order is liable to be quashed and cash to be returned (Paras 1-4). B) Goods and Services Tax - Seizure - Section 67(2) of Central Goods and Services Tax Act, 2017 - Validity of Seizure - Cash of Rs.1,71,07,500/- seized from residential premises of petitioner No.1 during search - Court found that seizure order did not comply with mandatory requirements of Section 67(2) as it was not authorized by specified officers and reasons not recorded - Held that seizure is invalid and cash must be refunded (Paras 3-4).
Issue of Consideration
Whether the seizure of cash from the residential premises of the petitioner under Section 67(2) of the CGST Act, 2017, was valid and whether the petitioners are entitled to refund of the seized cash.
Final Decision
The court allowed the writ petition, quashed the seizure order dated 21.09.2022 in respect of cash of Rs.1,71,07,500/-, and directed the respondents to refund the said cash to the petitioners within four weeks.
Law Points
- Seizure under Section 67(2) of CGST Act requires prior authorization from specified officers
- Seizure order must record reasons
- Non-compliance renders seizure invalid
- Cash seized without proper authorization must be returned
