The Supreme Court is all set to decide the issue of whether ‘cash’ qualifies as a ‘thing’ under GST.
The bench of Justice J.B. Pardiwala and Justice R. Mahadevan while issuing the notice to the assessee stated, “we need to interpret the expression “and seize or may himself search and seize such goods, documents or books or things”.
The short question of law is whether the Officers of the G.S.T. are empowered to seize cash at the time of raid of the premises of the assessee in exercise of their powers under Section 67(2) of the G.S.T. Act.
Whether ‘Cash’ Qualify As Thing’ Under Section 67 of the GST Act?
In terms of Section 67 (1) of the GST Act, the proper officer, not below the rank of Joint Commissioner, is empowered to authorize any officer of the central tax to inspect any place of business of a taxable person or persons engaged in the business of transporting or storing of goods.
However, the inspection can be authorized only if the proper officer has reasons to believe that the taxable person has suppressed any transaction relating to supply of goods or services or both; or suppressed the stock of goods in hand; or has claimed input tax credit in excess of his entitlement; or has otherwise contravened any provision of the Act or the Rules made thereunder, to evade payment of tax.
In terms of section 67, a proper officer may only seize goods, documents or books or things if the proper officer has reasons to believe that any goods, which are liable for confiscation, or any documents or books or things, which in his opinion will be useful or relevant for any proceedings under the Act.
The expression ‘goods’ is defined in Section 2(52) clearly excludes money. The term “money” neither fell within the definition of the terms ‘goods’ nor could be considered as ‘things’. The term ‘things’ was required to be construed by applying the doctrine of ejusdem generis, as taking colour from the preceding words, ‘documents’ and ‘books’.
Whether ‘Cash’ Qualify As Thing’ : Decision By Various High Courts
The Gujarat High Court in the case of Bharatkumar Pravinkumar And Co. Versus State Of Gujarat has held that cash does not fall within the definition of goods. And, prima facie, it is difficult to accept that cash could be termed as a ‘thing’’ useful or relevant for proceedings under the GST Act. The second proviso to Section 67(2) of the GST Act also provides that the books or things so seized would be retained by the officer only so long as may be necessary “for their examination and for any inquiry or proceedings under the Act.”
There is decision of Madhya Pradesh High Court in the case of Smt.Kanishka Matta Vs. Union of India, where the Court opined that the term “thing” would include “money”, he would subsequently pressing into the service of the decision of Division Bench of Kerala High Court in the case of Shabu George Vs. State Tax Officer (IB), which, after considering the decision of Madhya Pradesh High Court, held in favour of the assessee holding that 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.
Delhi High Court in the case of Arvind Goyal CA Vs Union of India and others in W.P.(C) 12499/2021, where keeping in view the larger perspective of provision of Section 67(2) of the Act, the Division Bench of Delhi High Court indicated that the seizure is limited to goods liable for confiscation or any documents, books or things, which may be “useful for or relevant to any proceedings under this Act”. Division Bench also held that the cash does not fall within the definition of term “goods” and it is also difficult to accept that cash could be termed as a “thing” useful for or relevant for proceedings under the GST Act.
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Case Details
Case Title: COMMISSIONER OF CGST Versus ANSHUL JAIN
Case No.: SPECIAL LEAVE PETITION (CIVIL) Diary No.35437/2024
Date: 09-12-2024
Counsel For Petitioner: N. Venkataraman, A.S.G.
