GST Officers must confine their authority to seizure of goods and cannot seize cash or bullion solely based on suspicion of it being undisclosed income: SC

 

In a significant development in GST enforcement jurisprudence, the Supreme Court on April 17, 2025, dismissed the Revenue’s Special Leave Petition (SLP) in the case of Commissioner of CGST vs Deepak Khandelwal, upholding the Delhi High Court’s decision.

The Hon’ble Delhi High Court had ruled that the ‘proper officer’ under Section 67(2) of the CGST Act does not have the power to seize currency, bullion, or other valuable assets merely on the ground that they represent “unaccounted wealth.”

The Supreme Court, while dismissing the SLP, clearly stated: “No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India.”

This decision reaffirms that search and seizure powers under GST law are not unlimited. Officers must confine their authority to seizure of goods liable for confiscation under the CGST Act, and cannot seize cash or bullion solely based on suspicion of it being undisclosed income.

The case sets a binding precedent on the limits of administrative discretion under Section 67, protecting businesses from arbitrary seizure of personal and financial assets without due legal process.

Implication: Enforcement actions under GST must be strictly confined to statutory limits, and any overreach in seizure actions can be successfully contested in constitutional courts.

The judgment summary is as under:
(2025) TaxCorp(IDT) 10800 (GST), Bench: Justice Abhay S. Oka and Justice Augustine George Masih

The copy of the order is as under:

VIB17082023CW67392021_194711