Desk of CA. Praveen Sharma – 960 Series (CAPS)

Bombay High Court in the case of Smurti Waghdhare (daughter of Suhas Waghdhare)

The Bombay High Court held that the seizure of ?1 crore in cash by GST authorities was illegal and without proper legal basis.

During search proceedings, cash of ?60 lakh was taken from one premises and ?40 lakh from the residence of the petitioner’s parents. The department alleged that the money was linked to a fake billing and fake ITC racket involving another person. However, the Court found that no proper justification was provided for seizing the cash.

The Court observed that the officers failed to establish valid grounds for taking the cash and could not explain how the seized amount was necessary for GST proceedings. It was also noted that the required legal procedure after seizure was not followed within the prescribed time. Further, the records indicated that the cash belonged to the petitioner, and this was not disproved by the department.

The Court also questioned the action of transferring the cash to the Income Tax Department, as no clear authority for such action was demonstrated.

Accordingly, the Court set aside the seizure orders and directed the department to return the entire ?1 crore along with applicable interest within two weeks. However, it clarified that this decision would not impact any separate income tax proceedings.

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CAPS