Nand Kishore Gupta vs. The Additional Director General, Directorate General Of GST Intelligence & Ors.

Held

The Court held that Indian currency cannot be considered "Goods" under Section 2(52) of the Central Goods and Services Tax Act, 2017. The definition of "goods" explicitly excludes "money". Indian legal tender is defined as "money" under Section 2(75) of the Act. Consequently, the power to seize "goods" under Section 67 of the Act does not extend to the seizure of cash. The Court found that the purpose of Section 67 is to unearth tax evasion and ensure taxable supplies are taxed, not for the recovery of tax or seizure of currency. The seizure of Rs. 23,50,000/- was therefore held to be unsustainable in law. The Court allowed the writ petition, directing the respondents to return the seized amount along with applicable interest to the petitioner. The Court also referred to Section 130 of the Act, which pertains to confiscation of goods or conveyances for contraventions with intent to evade tax, and noted that its clauses (i) to (iv) of sub-section (1) clearly indicate that only goods supplied in contravention, unaccounted goods, or goods supplied without registration are subject to confiscation, not cash.

Facts

The petitioner, Nand Kishore Gupta, proprietor of M/s. Ashish Traders, a firm dealing in iron scrap, filed a writ petition challenging the seizure order INS-02 dated February 15, 2021. The Directorate General of Goods and Services Tax Intelligence (DGGI) seized Indian currency amounting to Rs. 23,50,000/- from the petitioner's residential premises in Delhi. This seizure occurred during a search related to an investigation into alleged fraudulent availment of Input Tax Credit by M/s. Jai Mateshwari Steels Pvt. Ltd. The petitioner sought the quashing of the seizure order and the release of the seized currency with applicable interest.

Key Issues

1. Whether Indian currency can be considered "Goods" within the meaning of Section 2(52) of the Central Goods and Services Tax Act, 2017, thereby making it liable for seizure under Section 67 of the Act? Petitioner's arguments: The petitioner contended that Indian currency is explicitly excluded from the definition of "goods" under Section 2(52) of the Act, as it falls under the definition of "money" in Section 2(75). Therefore, the seizure of cash under Section 67 was illegal. The petitioner relied on the decisions in Deepak Khandelwal v. Commissioner of CGST, Delhi West & Anr. and Rahul Tayal & Ors. vs. Additional Director Directorate General of GST Intelligence. Revenue/State's arguments: The judgment does not record any specific arguments made by the respondents regarding the interpretation of "goods" or the validity of the seizure of currency under Section 67. The respondents were represented by counsel, but their contentions on this specific issue are not detailed in the provided text.