Revenue Department is not empowered to seize Cash under GST

editor — Sat, 30 Mar 2024 10:09:45 +0000

The Delhi High Court, in the matter of Jagdish Bansal v. Union of India [W.P. (C) No. 16677 of 2023 dated February 26, 2024], granted relief to the petitioner by allowing the writ petition. The court instructed the Revenue Department to return the seized cash along with interest. The judgment emphasized that the Revenue Department lacks authority to seize cash under the applicable GST laws.

Facts of the case:

Search and seizure procedures were conducted at the premises of Jagdish Bansal, resulting in the confiscation of cash by the Revenue Department.

Displeased by this action, Jagdish Bansal filed a writ petition in the High Court, challenging the lawfulness of the cash seizure.

Issue:

The central issue at hand was whether the Revenue Department possessed the legal authority to seize cash under the GST framework.

Held:

In its ruling on W.P. (C) NO. 16677 OF 2023, the Delhi High Court made the following determinations:

Referencing the decision of the Delhi High Court in K.M Food Infrastructure Pvt Ltd Through Its Director Mukesh Kapoor Vs Director General DGGI Headquarters [W.P. (C) 328/2024 dated February 13, 2024], the court construed Section 67 of the Central Goods and Services Tax Act, 2017.
It observed that cash does not fall under the definition of goods but rather under the definition of money as outlined in Section 2(75) of the CGST Act.
The court reiterated that cash cannot be categorized as goods and therefore cannot be subject to seizure.
It concluded that there was no valid reason for the Revenue Department to retain the seized cash.
Consequently, the court deemed the impugned order as null and directed the Revenue Department to return the seized cash along with interest.

Guidelines Regarding Cash Limits in Home under Tax Regulations

editor — Fri, 22 Mar 2024 06:29:06 +0000

Under the provisions of the Income-Tax Act (ITA) of 1961, there exists no stipulation on the maximum amount of cash permissible to be kept within one’s residence. However, during an income tax inspection, individuals must provide verifiable sources for the cash in their possession.

This particularly applies to funds that must be accounted for in terms of income. If the documentation provided by an individual does not align with the amount of cash found at their residence, income tax authorities possess the authority to penalize them. In such instances, unaccounted cash can be seized, with penalties reaching as high as 137% of the total amount.

It is imperative to consider the subsequent regulations regarding cash, as mandated by the income-tax department:

Prohibition on accepting cash amounts of Rs 20,000 or more for loans or deposits: The income-tax department strictly prohibits individuals from accepting cash sums of Rs 20,000 or higher in relation to loans or deposits.
Compulsory presentation of Permanent Account Number (PAN) for transactions exceeding Rs 50,000: According to the directives of the Central Board of Direct Taxes (CBDT), individuals are required to furnish a PAN card for transactions involving deposits or withdrawals exceeding Rs 50,000 at a time.
Scrutiny by investigative agencies for cash-based asset transactions surpassing Rs 30 lakh: Indian citizens involved in cash transactions exceeding Rs 30 lakh concerning the purchase or sale of assets may come under scrutiny by investigative agencies.
Investigation into credit or debit card transactions surpassing Rs 1 lakh: Any single transaction exceeding Rs 1 lakh made through credit or debit cards is likely to attract the attention of investigative agencies.
Imposition of a 2% Tax Deducted at Source (TDS) on withdrawals surpassing Rs 1 crore: Individuals withdrawing over Rs 1 crore in cash from banks within a financial year are subject to a 2% TDS deduction.
Penalty for cash transactions surpassing Rs 20 lakh: Cash transactions exceeding Rs 20 lakh in a year may lead to penalties, while the purchase or sale of cash-based property worth more than Rs 30 lakh could prompt investigations by regulatory bodies.
Restrictions on cash payments: Limits include refraining from making cash purchases exceeding Rs 2 lakh without PAN and Aadhaar details, as well as restrictions on credit or debit card transactions exceeding Rs 1 lakh.
Regulations on familial transactions and loans: Accepting cash sums exceeding Rs 2 lakh from a relative in a single day or obtaining loans exceeding Rs 20,000 in cash from any individual are prohibited.

Adhering to these regulations is essential to avoid legal consequences and ensure full compliance with income tax laws and regulations.

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Revenue Department is not empowered to seize Cash under GST

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Guidelines Regarding Cash Limits in Home under Tax Regulations

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