Smt Kanishka Matta vs. Union Of INDIA

Held

The Court held that the authorities were justified in seizing the cash amount from the petitioner's husband under Section 67(2) of the CGST Act, 2017. The Court relied on the case of Surjeet Singh Chhabra Vs. Union of India, which held that confessional statements made before Customs Officers, even if retracted, are admissible as admissions, as these officers are not police officers. Similarly, in this case, the statements made by the petitioner's husband confessing guilt were considered binding, and his subsequent retraction did not negate the validity of the seizure at the investigation stage. The Court also referenced R. S. Company Vs. Commissioner of Central Excise, which supported the revenue's stance on confessional statements. The Court found that the judgment relied upon by the petitioner in Vinod Solanki Vs. Union of India, concerning the need for corroboration of retracted confessions, was not applicable at the investigation stage. The Court concluded that the material collected during the search and seizure could not be brushed aside, and the Income Tax Act, 1961 (though not directly applicable here, cited for principles of judicial review in search and seizure) provides a complete mechanism for adjudication. Therefore, the question of releasing the amount does not arise until the investigation is complete and the matter is finally adjudicated. The writ petition was dismissed.

Facts

The petitioner, Smt. Kanishka Matta, wife of Shri Sanjay Matta, filed a writ petition seeking the release of Rs. 66,43,130/- cash seized from her residential premises by the Directorate General of GST Intelligence (DGGSTI). The seizure occurred during a search operation on May 30, 2020, at the business and residential premises of Shri Sanjay Matta, proprietor of M/s. S. S. Enterprises, which deals in confectionery and pan masala. The petitioner contended that Section 67(2) of the CGST Act, 2017, does not empower the authorities to seize cash, and that cash cannot be considered "Document, Book or Things." The respondents argued that the seizure was justified under Section 67(2) of the CGST Act, 2017, based on specific input regarding GST evasion on pan masala, and that Shri Sanjay Matta voluntarily stated the seized cash represented sale proceeds of illegally sold pan masala without GST payment. The petitioner's husband later retracted this statement via an affidavit.

Key Issues

1. Whether Section 67(2) of the CGST Act, 2017, empowers the authorities to seize cash from a person's premises, and if cash can be considered "Document, Book or Things" under the Act? (Question of law) 2. Whether the seizure of cash is violative of Article 14 and Article 19 of the Constitution of India? (Question of law) 3. Whether a retracted confession made by the petitioner's husband can be the sole basis for seizure and detention of cash, especially when the petitioner is not registered under GST? (Question of mixed law and fact) Petitioner's Arguments: - Section 67(2) of the CGST Act, 2017, does not grant power to seize cash, as cash is not a "Document, Book or Thing." - The seizure is illegal and violates Articles 14 and 19 of the Constitution. - The husband's retracted statement should not be relied upon, especially as the petitioner is not registered under GST. - The raid on residential premises was also illegal. Revenue's Arguments: - The seizure of cash and documents was justified under Section 67(2) of the CGST Act, 2017, based on reasonable belief of goods/documents being secreted. - Shri Sanjay Matta voluntarily confessed that the cash represented sale proceeds of illegally sold pan masala without GST payment. - The petitioner lacks locus standi to file the petition as the seized cash and documents do not pertain to her. - Section 67(2) read with the definition clause empowers the seizure.