DGGI Officers Can’t Seize Cash Without Reason To Believe: Bombay High Court Quashes Rs. 1 Crore Seizure

The Bombay High Court has quashed the seizure of Rs. 1 crore in cash by officers of the Directorate General of GST Intelligence (DGGI), holding that the action was taken without authority under the Central Goods and Services Tax Act, 2017 and without reason to believe. The bench of Justice G. S. Kulkarni and Justice Aarti Sathe has observed that as per Section 67(2) of the CGST Act the seizure has to be of any goods or any documents or books or things which are liable for confiscation, and for which the proper officer not below the rank of Joint Commissioner, should have “reason to believe” that the same are useful or relevant to any proceedings under the CGST Act, and it is only on the satisfaction of this condition that the seizure could be made. The bench noted that the Respondent-Department has given a go-by to the expression “reason to believe”, which forms the bedrock to initiate proceedings under Section 67(2) of the CGST Act to seize goods, documents, books or things. The officers have further not recorded any reasons to come to the conclusion that the cash found at the premises of the Petitioner was liable to be seized. The bench stated that the provisions of Section 67(2) do not mandate the seizure of any cash, and therefore there was no power under which the Respondents could seize the cash from the Petitioner’s premises. The case arose after GST intelligence officers conducted searches in June 2023 at the petitioner’s office premises at Charni Road, Mumbai, and at the residence of her parents. During the search operations, officials seized ₹60 lakh from the petitioner’s office and ₹40 lakh from her parents’ residence through seizure orders issued in Form GST INS-02. The petitioner approached the High Court seeking quashing of the seizure orders and release of the cash, arguing that the GST authorities lacked statutory power to seize cash under the provisions of the CGST Act. In the petition, Waghdhare contended that the seizure of cash was illegal because the CGST Act permits seizure only of goods, documents, or things relevant to tax proceedings. She argued that mere possession of cash cannot justify seizure under GST laws unless it has a direct nexus with taxable goods or evasion proceedings. The petitioner also sought directions to the authorities to deposit the seized amount with the court pending disposal of the petition and to provide copies of search authorisations issued during the investigation. After examining the provisions of the CGST Act and the circumstances of the case, the High Court held that the seizure of cash by GST authorities had no legal backing. The bench observed that the GST authorities could not rely on the provisions of the CGST Act to justify the seizure of currency, particularly when the statute does not expressly grant such power in the context of GST investigations. The Court further noted that the authorities also did not have the power under the GST law to hand over the seized cash to the Income Tax Department for further proceedings. According to the Court, the seizure orders issued by the GST intelligence officers were therefore unsustainable in law. Setting aside the impugned orders dated June 27 and June 28, 2023, the Court directed the GST authorities to immediately release the seized cash. The bench ordered that the entire ₹1 crore be returned to the petitioner directly in her bank account along with applicable interest within two weeks from the date the order is made available to the authorities. While granting relief to the petitioner, the High Court clarified that its findings were limited to the legality of the seizure under the CGST Act. The Court added that its observations would not affect any income tax proceedings that may be pending or initiated against the petitioner. The writ petition was accordingly disposed of, with the Court making the rule absolute and granting relief in favour of the petitioner. Case Details Case Title: Smurti Waghdhare Versus Joint Director Citation: JURISHOUR-295-HC-2026(BOM) Case No.: WRIT PETITION NO. 839 OF 2025 Date: 10th March 2026 Counsel For Petitioner: Abhishek Rastogi Counsel For Respondent: Jitendra Mishra Click Here To Read Order Read More: No Interim Stay on Central Excise Notifications Introducing Capacity-Based Levy for Chewing Tobacco: Calcutta High Court

DGGI Officers Can’t Seize Cash Without Reason To Believe: Bombay High Court Quashes Rs. 1 Crore Seizure

Membership Required

Latest articles

JURISHOUR | TAX LAW DAILY BULLETIN : 10 AUGUST, 2026

Principal Bench Has Exclusive Jurisdiction Where Dispute Turns on Place of Supply Under IGST Act: GSTAT

Madras High Court Stays GST Order Mandating Cash Payment of Restaurant Service Tax Liability

Offshore Equipment Supplies Not Taxable in India Without Fixed-Place PE: ITAT

More like this

JURISHOUR | TAX LAW DAILY BULLETIN : 10 AUGUST, 2026

Principal Bench Has Exclusive Jurisdiction Where Dispute Turns on Place of Supply Under IGST Act: GSTAT

Madras High Court Stays GST Order Mandating Cash Payment of Restaurant Service Tax Liability

About us

Company

Categories