Asset Seizure Without Official Seizure: Revenue Department’s Power Under the Central Goods and Services Tax Act, 2017: A Case Study

In a landmark judgment, the Delhi High Court has clarified the powers of the Revenue Department under the Central Goods and Services Tax Act, 2017 (CGST Act). The case in question is Baleshwari Devi v. Additional Commissioner (Anti-Evasion), Central Goods and Service Tax [W.P.© 5056 of 2023 dated July 21, 2023].

Background of the Case

The petitioner, Baleshwari Devi, is a senior citizen and proprietor of a concern named M/s Bishan Saroop Ram Kishan. She filed a petition against the action of the respondents in removing a sum of ₹19,50,000/- from her premises during a search conducted under Section 67 of the CGST Act. The petitioner was not present at her residence at the time of the search, and the room occupied by her was locked. The respondents seized some files, loose papers, and cheque leaves. They also found a sum of ₹19,50,000/- in cash and took possession of the same.

The Controversy

The controversy arose when the respondents took possession of the cash without officially seizing it. They coined a term ‘resume’ to denote taking forcible possession of assets without recording seizure. This action was deemed illegal as there are no provisions under the CGST Act that allow such dispossessing of assets without official seizure.

The Judgment

The Delhi High Court ruled that the seizure of cash was invalid due to procedural discrepancies, absence of legal provisions, and wrongful assumptions made by the respondents. It directed the respondents to refund the seized amount to the petitioner.

Implications

This judgment upholds strict adherence to legal procedures and rights of citizens under the CGST Act. It clarifies that the Revenue Department has no power to take possession of personal assets without official seizure under the CGST Act. This case serves as a precedent for future cases involving similar issues.

In conclusion, this judgment reinforces the importance of following due process and respecting citizens’ rights during tax investigations. It serves as a reminder that even in their pursuit to curb tax evasion, authorities must operate within their legal boundaries.

Here are some related FAQs on the Revenue Department’s power to take possession of personal assets without official seizure under the Central Goods and Services Tax Act, 2017 (CGST Act):

• Q: Can the Revenue Department take possession of my personal assets without an official seizure order?

A: No, the Revenue Department does not have the power to take possession of your personal assets without an official seizure order. The CGST Act only allows the Revenue Department to seize goods that are liable for confiscation or any documents, books or things which may be useful for or relevant to any proceedings. Cash does not fall within the definition of “goods” under the CGST Act, so the Revenue Department cannot seize it without an official seizure order.

• Q: What is the difference between a search and a seizure?

A: A search is an inspection of a person’s premises or belongings. A seizure is the taking of possession of a person’s property. The Revenue Department can conduct a search without a warrant, but it can only seize property with a warrant.

• Q: What are the requirements for a valid seizure warrant?

A: A valid seizure warrant must be issued by a competent authority, such as a magistrate. The warrant must specify the property that is being seized, the grounds for the seizure, and the date and time of the seizure.

• What should I do if the Revenue Department seizes my personal assets without an official seizure order?

A: If the Revenue Department seizes your personal assets without an official seizure order, you should immediately contact a lawyer. A lawyer can help you challenge the seizure and get your assets returned to you.

The case of Baleshwari Devi v. Additional Commissioner (Anti-Evasion), Central Goods and Service Tax [W.P.(C) 5056 of 2023 dated July 21, 2023] is a recent case that confirmed the Revenue Department’s lack of power to seize personal assets without an official seizure order. In this case, the Revenue Department had seized the petitioner’s cash and jewelry during a search operation. The petitioner challenged the seizure, arguing that the Revenue Department did not have the power to seize her personal assets without an official seizure order. The court agreed with the petitioner and ordered the Revenue Department to return the seized assets.

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