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RAJEEV CHHATWAL v. COMMISSIONER OF GST (EAST) 

2023: DHC:6060-DB, HIGH COURT OF NEW DELHI 

 Background:

1. Timeline:

  23 Jan 2020 – Search at the residential premises

  29 Feb 2020 – Appearance with respect to Summon issued. 

  01 Mar 2020 – Petitioner arrested with 2 others. 

                          (later released on Bail) 

2. Basic Idea of the Section Involved:

Section 67(2) of the CGST Act empowers a proper officer, not below the rank of Joint Commissioner, to inspect, search and seize goods, documents, books or other items. This action is authorised when the officer has  reasonable grounds to believe that.

1. Any Goods liable for confiscation, of

2. Documents or books that are useful or relevant to proceedings under the CGST Act are secreted in any place. 

he may authorize in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things 

Simple Summary: 

The Petitioner seeks the release of Indian currency amounting to ₹15,92,000/- seized by the Respondent during a search operation on the ground that Section 67(2) of the CGST Act does not empower any such seizure.

Argument of the Petitioner:

1. The petitioner claims that he was not present at the time of the search but the family members present requested the officials not to seize the said amount as the same belonged to the family and was kept in the locker as a precautionary measure because the house was under renovation and a number of laborer’s were working at the premises. 

2. The petitioner also claims that he had also signed various documents and statements under threat and coercion. 

3. Petitioner claims that he is not involved in making any supplies and is not a taxpayer and is not concerned with the alleged fake ITC availed by any other entity as alleged. 

4.  Section 67(2) does not empower seizure of Indian Currency.

Arguments of Respondent:

1. The Respondent argued that the Petitioner had made a voluntary statement on 29.02.2020, admitting involvement in a racket of issuing fake invoices along with other accused individuals, namely, Asif Khan and Arjun Sharma. 

2. The respondent claimed that the accused individuals, including the Petitioner, had issued invoices from various firms without the actual supply of goods, resulting in the wrongful availing of Income Tax Credit (ITC) to the tune of approximately ₹11 crores. 

3. The Respondents argued that the investigation was not yet complete, and as a result, no Show Cause Notice had been issued at the time of the case.

 Judgement:

1. The Court ruled in favor of the Petitioner directing the respondent to release the Indian currency seized during the search operation, amounting to ₹15,92,000/- and to remit the same to the Petitioner’s bank account within a period of two weeks from the date of the judgement along with accrued Interest.

2.  The Judgement noted that the question regarding the seizure of currency  under Section 67(2) of the CGST Act was addressed in a recent decision, specifically citing “Deepak Khandelwal Proprietor M/s Shri Shyam Metal v. Commissioner of CGST, Delhi West & Anr.: 2023: DHC: 5823 – DB -2023-VIL-544-DEL.” 

This prior decision supported the Petitioner’s position.