Delhi High Court: 'Cash' Excluded From 'Goods' Definition under GST Act, Cannot Be Seized

Delhi High Court: 'Cash' Excluded From 'Goods' Definition under GST Act, Cannot Be Seized

The Delhi High Court, bench of Justices Sanjeev Sachdeva and Justice Ravinder Dudeja, has directed the respondent department to either forfeit or return the cash seized from the petitioner's premises, along with interest.

The court noted that 'cash' falls within the definition of 'money' as per Section 2(75) of the Central Goods and Services Tax Act, 2017 (GST Act), and is explicitly excluded from the definition of 'goods'. Therefore, since cash does not qualify as a good, it cannot be seized under the provisions of the Act, which restricts seizure of goods liable for confiscation.

The petitioner has sought a declaration asserting that the seizure of cash by respondent no.2 from both the residential premises and office of the petitioner was unlawful.

This assertion stems from a search and seizure operation conducted at the petitioner's premises, encompassing both the residential premises and the petitioner's shop, on the 30th of November 2022. During this operation, a substantial sum of cash amounting to Rs.65,00,000/- was seized from the residential premises, and an additional Rs.7,00,000/- was confiscated from the petitioner's office. The petitioner contends that these seizures are unjustified and illegal, prompting the legal challenge seeking a declaration to this effect.

The court referred to the case, K.M. Food Infrastructure Pvt. Ltd. v. Director General , wherein it was established that cash falls outside the definition of 'goods' as outlined in Section 2 (75) of the Central Goods and Services Tax Act 2017. Instead, cash is categorized as 'money' under the Act. Building upon this interpretation, the court held that since cash does not qualify as goods, it cannot be seized under the provisions of the Act, which are limited to goods liable for confiscation. Applying the ratio of this judgment to the present case, the court concluded that there was no justification for the continued retention of the seized cash by the respondents.

Consequently, the court allowed the petitioner's plea and directed the respondents to forfeit or remit the seized cash to the petitioner along with interest.