Rs. 25.3 Lakh Cash Seizure by DGGI, Income Tax Dept.: Delhi High Court Refuses To Interfere
Rs. 25.3 Lakh Cash Seizure by DGGI, Income Tax Dept.: Delhi High Court Refuses To Interfere
The Delhi High Court has declined to grant interim relief to the petitioner firm seeking the release of Rs. 25.3 lakh in cash seized by Directorate General of GST Intelligence (DGGI) and income tax department and directed the petitioner to respond to tax notices.
The bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta has observed that both the Departments i.e., DGGI and Income Tax Department, have issued their respective notices, and the resumption of cash was allegedly done almost about a year ago, the Petitioner Firms are free to defend their position with the Departments by replying to the concerned show cause notices.
The Petitioner Firms - M/s N.P. Industries And M/s Arav Enterprises, are run by the sole proprietors i.e., Mr. Pradip Jain and Mr. Nitesh Jain, who are father and son. It is the case of the Petitioner Firms that the resumption of the cash took place during a search operation conducted by the Directorate General of Goods & Services Tax Intelligence (DGGI) on 27 February, 2024, at the residential premises of the sole proprietors of the Petitioner Firms. The said discovery was allegedly communicated by the DGGI to the Income Tax Department on 29th February, 2024, on the ground that the same was unaccounted cash. Accordingly, the cash was stated to have been resumed by the DGGI and handed over to the Income Tax Department one week later i.e., on 4th March, 2024.
The Show Cause Notice has been issued by the DGGI and a notice under Section 148 of the Income Tax Act, 1961 dated 26th March, 2025 for re-assessment has also been issued.
Almost one year and three months later, the resumption of cash by the DGGI has been challenged, after the two notices have been issued.
The DGGI submitted that the allegation against the Petitioners was that fake Input Tax Credits under the Act was being availed of by the Petitioner Firms through 13 non-existent firms. When the search was conducted at the residence of the proprietors of the Petitioner Firms on the basis of the said allegations, unaccounted cash was found and was handed over to the Income Tax Department.
The court opined that no ground for interference with the ongoing proceedings is made out in the petitions.
Case Details
Case Title: M/S N.P. Industries Versus Union Of India & Ors.
Case No.: W.P.(C) 8053/2025 & CM APPL. 35272/2025
Date: 30.05.2025
Counsel For Petitioner: Kunwar Gangesh Singh
Counsel For Respondent: Harpreet Singh
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Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
