Kerala High Court
Shabu George vs State Tax Officer (Ib) on 24 March, 2023
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
FRIDAY, THE 24TH DAY OF MARCH 2023 / 3RD CHAITHRA, 1945
WA NO. 514 OF 2023
AGAINST THE ORDER/JUDGMENT IN WP(C) 39406/2022 OF HIGH
COURT OF KERALA
APPELLANTS/PETITIONERS:
1 SHABU GEORGE, AGED 55 YEARS
PULAKUDYIL HOUSE, ARAKUZHA-PO,
MUVATTUPUZHA-686672, PIN - 686672
2 GIGI MATHEW, AGED 53 YEARS
THEKKEL HOUSE, NADUKKARA, AVOLY P.O,
MUVATTUPUZHA-686670, PIN - 686670
BY ADVS.
K.N.SREEKUMARAN
P.J.ANILKUMAR (A-1768)
N.SANTHOSHKUMAR
RESPONDENTS:
1 STATE TAX OFFICER (IB)
STATE GOODS & SERVICES TAX DEPARTMENT,
MATTANCHERRY AT MINI CIVIL STATION,
ALUVA - 683101
2 JOINT COMMISSIONER (IB)
STATE GOODS & SERVICE TAX DEPARTMENT,
REVENUE TOWERS, ERNAKULAM,
KOCHI-682035
3 COMMISSIONER OF STATE TAXES
STATE GOODS & SERVICE TAX DEPARTMENT,
TAX TOWERS, KILLIPALAM, KARAMANA-P.O.
THIRUVANANTHAPURAM-695002.
BY SMT.M.M.JASMINE, GOVERNMENT PLEADER
BY SRI.P.R.SREEJITH, SC
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
24.03.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WA No.514 of 2023
:2:
A.K. JAYASANKARAN NAMBIAR
&
MOHAMMED NIAS C.P., JJ
......................................................
WA No.514 of 2023
.................................................................
Dated this the 24th day of March, 2023
JUDGMENT
A.K.Jayasankaran Nambiar.J
This writ appeal is preferred by the petitioner in WP(C)No.39406 of
2022, aggrieved by the judgment dated 16.2.2023 of a learned single Judge
who disposed the writ petition directing the first respondent - State Tax
Officer (IB) to consider and pass orders on a representation preferred by
the appellants herein for release of the cash that was seized from his
premises in connection with an investigation done by the authorities under
the GST Act. The learned single Judge did not accept the contention of the
appellant that the seizure of cash was unwarranted especially when the
investigation itself was for alleged evasion of tax due from the appellants
under the GST Act.
2. In the appeal before us, the learned counsel for the appellant
points out that, while it may be a fact that the statutory provisions
authorize the seizure of 'things' from the premises of an assessee who is
proceeded against under the GST Act, and the word 'things' would include
WA No.514 of 2023
cash in appropriate cases, the instant is a case where the seizure of cash
was wholly unwarranted, more so, when the cash did not form part of the
stock in trade of any business stated to have been carried on by the
appellant. It is further pointed out that although the inspection of the
premises of the appellant was conducted as early as on 9.6.2022, nothing
was heard from the authorities till November 2022, when the appellant
preferred a representation seeking a return of the cash seized from his
premises. It is stated that the appellant has still not been served with any
show cause notice pursuant to the seizure of the cash from his premises.
3. During the pendency of this writ appeal, the Intelligence
Officer passed an order dated 21.3.2023, disposing the representation
preferred by the appellants as per the directions of the learned single
Judge. On a reading of the order that rejects the said representation we
find that the stand taken by the Intelligence Officer is essentially that in
view of the specific provisions of Section 67(2) of the CGST Act, which
authorises the seizure of 'things', which inter alia includes cash also as held
by the High Court of Madhya Pradesh in the judgment dated 26.8.2020 in
WP(C)No.8204 of 2020, the authority was justified in seizing the cash and
retaining the same pending a culmination of the investigation. We must
admit to being a bit puzzled by the stand taken by the said Intelligence
Officer in the order dated 21.03.2023 that is now produced before us by
the learned Government Pleader. While it may be a fact that Section
67(2) of the CGST Act authorizes the seizure of things, including cash in
appropriate cases, we do not think that the present is a case that called for
WA No.514 of 2023
a seizure of the cash found in the premises of the appellants at the time of
the search. The power of any authority to seize any 'thing' while
functioning under the provisions of a taxing statute must be guided and
informed in its exercise by the object of the statute concerned. In an
investigation aimed at detecting tax evasion under the GST Act, we fail to
see how cash can be seized especially when it is the admitted case that the
cash did not form part of the stock in trade of the appellant's business. It is
evident from the order of the Intelligence Officer that the cash that was
seized from the premises of the appellants was not the stock in trade of the
quarry business that was conducted by the appellant. The findings of the
Intelligence Officer that 'it is suspicious that this much amount of money
kept in the house of M/s.Shabu as idle and not deposited at bank' and
further 'the amount received as gift on the day of marriage has not been
recorded in his income tax return and from this it is evident that the money
is from illicit sources' reveal the extent to which authorities under the Act
are misinformed of their powers and the limits of their jurisdiction. The
aforesaid findings of the Intelligence Officer could perhaps have been
justified had he been an officer attached to the Income Tax department. In
the context of the GST Act, the findings are wholly irrelevant. We find that
the seizure of cash from the premises of the appellants was wholly uncalled
for and unwarranted. 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
WA No.514 of 2023
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.
Sd/- A.K. JAYASANKARAN NAMBIAR,
JUDGE
Sd/- MOHAMMED NIAS C.P.
JUDGE
dlk/24.3.2023
