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Cash can be seized in GST search says MP High Court

  • Sep 30, 2020 | Divita S Gupta

Cash can be seized in GST search says MP High Court

The High Court of Madhya Pradesh has held that cash falls under the definition of ‘things’ and as such can be seized during a search by GST authorities. The petitioner is in the business of confectionery items and stated in their petition that GST authorities had conducted a search of their office as well as residence seizing ₹66 lakhs in the process. The petitioner has argued before the court that as per Section 67(2) of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017), tax authorities do not have the power to seize cash. The petitioner further argued that cash cannot be treated as “Document, Book or Things” as per the definition under the definition clause of the CGST Act, 2017. As such, the tax authorities must be directed to release the seized cash. Tax authorities have argued that the petitioner has been involved in large scale tax evasion under GST and that the petitioner had stated that the money seized were part of the proceeds earned on sale of confectionery items. The High Court of Madhya Pradesh held that a conjoint reading of Section 2(17), 2(31), 2(75) and 67(2) makes it clear that money can also be seized by an authorized officer as it falls under the definition of things. 

Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.

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