Goods & Services Tax (GST) in IndiaCash That Does Not Form Part Of Stock While Trading Cannot Be Seized

August 22, 20230

Cash That Does Not Form Part Of Stock While Trading Cannot Be Seized under GST


The Supreme Court in the case of STATE TAX OFFICER V SHABU GEORGE (SLP No.27670/2023) decided on 31.07 2023 has dismissed the Special Leave Petition filed by the Revenue Department and has upheld the decision of Kerala High Court wherein it was held that the Revenue Department cannot seize the cash during the search that does not form part of stock while trading in Goods and Services Tax.


The present Special Leave Petition is filed by Shabu George (hereinafter referred to as Respondent), in the Supreme Court, aggrieved by the judgment the Kerala High Court, wherein State Tax Officer (hereinafter referred to as Appellant) has been directed to consider the representation of the Respondent for release of cash seized from his premises during investigation under CGST Act. During the search, the cash was seized from the premises of the Respondent, and was not received with the show cause notice even after 6 months of investigation. The Kerala High Court has observed that the purpose of investigation was aimed at detecting tax evasion so the cash seized during investigation which did not form part of stock in trade was not justified. Therefore, directed to release the cash which was seized incorrectly.

Issues Before the High Court

Whether the cash which does not form part of stock in trade of the business can be seized during search proceeding under GST?

Contentions Of the Parties

In the Hon’ble High Court, Respondents contended that the statutory provisions authorize the seizure of ‘things’ from the premises of the assessee who is proceeded against under the GST Act.

The Respondents further states that the word “things” would include cash, but in this case the seizure of cash is wholly unwarranted as it did not form part of stock in trade of the business of Respondent.

Moreover, it was submitted by the Respondents that the inspection was carried out on 09.06.2022 but have not heard anything from authorities till November 2022, then the Respondent preferred a representation to seek a return of the cash so seized. Moreover, there was no Show-cause Notice issued pursuant to the seizure od cash from his premises.

Also, the Respondents states that the purpose of investigation is to find the tax evasion under GST Act which nowhere includes the seizure of cash which is not perse a part of stock in trade of the business. Therefore, such seizure is irrelevant and must be given back.

Decision and Findings of the Supreme Court 

The Supreme Court  dismissed the present writ petition stating that the Supreme Court is not inclined to interfere with the impugned order and hence, this petition was dismissed.


The Hon’ble High Court of Madhya Pradesh, in the case of Kanishka Matta v UOI, [Writ Petition No.8204/2020], has clearly stated that the expression ‘thing’ as stated in Section 67(2) of Central Goods and Services Tax Act, 2017 would include the power to seize cash as well. Therefore, in the present case the investigation took place for finding the tax evasion and the cash seized does not form part of stock in trade of the business of Respondent and hence, the cash so seized must be given back to the Respondent.

– Team AMLEGALS, assisted by Ms. Aradhana Jain (Intern)

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