No, the Honorable High Court of Madras in the case of M/s. The Coronation Fireworks Factory V. The Joint Director & Another (W.P. (MD) No. 14221 OF 2024 And W.M.P (MD) No. 12477 of 2024 dated 01.07.2024) dismissed the writ petition seeking a refund of the seized amount of Rs. 1,82,25,000/-. The Honorable Court observed that the petitioner cannot obstruct the show cause proceedings merely because of the favourable order obtained from the Tribunal in Appeal No. 40138 of 2023. The impugned show cause notice is concerned with the appropriation of the seized amount from the petitioner’s partner towards the tax liability under the respective GST enactments. It does not propose to confiscate the cash but seeks to address the tax liability. The Honorable Court noted that the petitioner is required to explain why the seized amount should not be appropriated towards the tax liability and dismissed the writ petiion.
Author’s Comments
It is important to note that cash is not ‘goods liable to confiscation’ under section 130(1) but are ‘things’ which are considered ‘useful or relevant’ by the Authorized Officer to carry out ‘any further proceedings’. What, therefore, can be the ‘use or relevance’ of cash to be seized? There is a popular, mysterious, and erroneous understanding that ‘cash’ is illicit if discovered in search proceedings. Officers tend to seize cash without even ascertaining to whom it belongs. ‘Cash’ seizure does not directly point to proceeds from unaccounted sales. Seizure is a necessary requirement to ‘secure’ the specific ‘goods and documents, books, or things’ and to ‘identify’ them in later proceedings. A seizure does not imply ‘transfer of property’. Care must be taken that once the SCN is issued, it is the conclusion of the ‘investigation’ and therefore there is no further reason for Revenue to keep custody of seized articles. The Application must be preferred under section 67(6) to seek provisional release of seized ariticles.
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