Vijay Steelcon Private Limited Vs Principal Commissioner Of Central Tax

In this case, the petitioner has filed a legal challenge against the seizure of cash amounting to Rs. 65 lakhs (Rupees Sixty-Five Lakhs) from the residence of one of its directors on March 4, 2021. Additionally, the petitioner disputes a letter dated March 24, 2021, issued by respondent no. 1, which instructed the bank to release the aforementioned Rs. 65 lakhs. The petitioner’s grievances revolve around the legality and propriety of both the initial cash seizure and the subsequent directive to the bank.

Key points of contention include:

1. Seizure Legality: The petitioner argues that the seizure of Rs. 65 lakhs from the director’s residence was unwarranted and possibly conducted without adhering to proper legal procedures or justifications. The details surrounding the circumstances of the seizure, including whether due process was followed, are central to this dispute.

2. Bank Release Directive: The petition also challenges the letter from respondent no. 1 dated March 24, 2021. This letter instructed the bank to release the seized Rs. 65 lakhs, implying that there may have been procedural or jurisdictional overreach in making such a directive. The petitioner is likely questioning the authority under which respondent no. 1 acted and whether all regulatory and legal frameworks were properly considered.

3. Procedural Fairness: Underlying these challenges is a broader concern with procedural fairness and adherence to legal norms. The petitioner seeks a review and possible overturning of these actions, emphasizing the need for transparency and legality in enforcement actions.

The petition aims to secure relief from the court, potentially including the return of the seized funds and a declaration that the actions of respondent no. 1 were illegal or improper. The outcome of this case will hinge on the court’s interpretation of the applicable laws, the facts surrounding the seizure, and the justification for the bank directive.

The petitioner has filed this petition to contest the seizure of Rs. 65 lakhs from the residence of the petitioner’s Director on March 4, 2021. Additionally, the petitioner challenges a letter dated March 24, 2021, from respondent no.1, instructing the bank to release the seized Rs. 65 lakhs to the petitioner, but only for the payment of government dues. The petitioner asserts that an amount of Rs. 94,65,316, which it had deposited with the respondents, was wrongfully recovered without proper adjudication. The petitioner requests the court to instruct the respondent to accurately determine any tax, interest, or penalty owed by the petitioner and to apply the Rs. 94,65,316 already paid towards any amounts found due.

The petitioner has filed a petition challenging multiple actions taken by the respondents, including the seizure of Rs. 65 lakhs (INR 6.5 million) from the residential premises of the petitioner’s Director on March 4, 2021. Additionally, the petitioner contests a letter dated March 24, 2021, issued by Respondent No. 1, which directed a bank to release the seized Rs. 65 lakhs to the petitioner solely for the payment of government dues.

The petitioner also claims that Rs. 94,65,316 (INR 9.465 million) deposited with the respondents has been erroneously recovered without proper adjudication. They seek a directive for the respondents to determine the tax, interest, or penalty due and appropriate the deposited amount against the determined dues.

The sequence of events as presented by the petitioner includes a search conducted on March 4, 2021, at the petitioner’s company premises located in East Delhi. During this search, the respondents seized stock and sealed the premises on the grounds that the address had not been disclosed in the Form GST Reg.-06. Furthermore, a search was also carried out at the residential premises of the company’s Director in Jasola, New Delhi, where Rs. 65 lakhs in cash was seized.

The petitioner’s counsel strongly argued that the Panchnama (a document recording the details of the search and seizure) was not provided to the petitioner or its Director. This lack of documentation is presented as a procedural irregularity, indicating potential misconduct in the manner the search and seizure were executed.

The petitioner is thus seeking judicial intervention to:

1. Challenge the legality of the cash seizure.

2. Contest the directive limiting the use of the seized amount solely for government dues.

3. Address the erroneous recovery of the deposited sum without due adjudication.

4. Obtain a proper assessment of any tax, interest, or penalty due, and the appropriation of the previously paid amount towards any such liabilities.

This petition challenges several actions taken by the respondents concerning the petitioner’s company, focusing on a search and seizure operation, the detention of the petitioner’s director, and the subsequent handling of seized funds. The petitioner disputes the following key points:

1. Seizure of Cash: On March 4, 2021, the respondents conducted a search at the residential premises of the petitioner’s director and seized Rs.65 lakhs in cash. The petitioner contends that this seizure was unauthorized under the Central Goods and Services Tax Act, 2017 (CGST Act), and the required documentation (Panchnama) was not provided.

2. Detention of Director: During the search, the director, Mr. Puneet Bhudhiraja, was taken to the respondent’s office without a formal summons and detained overnight without lawful justification. This action allegedly led to the coercive deposit of Rs.33,99,236 on March 9, 2021.

3. Seizure and Release of Stock: The respondents also searched the petitioner’s company premises, including an undisclosed registered office, and seized stock from these locations. Despite the petitioner depositing an additional Rs.60,66,082 on March 25, 2021, the stock was not released until May 7, 2021.

4. Recovery of Funds: The petitioner claims that a total sum of Rs.94,65,316 has been recovered by the respondents without proper adjudication, arguing that this amount should be appropriated against any determined tax, interest, or penalty due.

5. Release of Seized Cash: The petitioner challenges a letter dated March 24, 2021, in which the respondents directed the release of the seized Rs.65 lakhs but restricted its use to the payment of government dues. The petitioner argues that this condition is not supported by the CGST Act.

In summary, the petitioner seeks judicial intervention to challenge the legality of the cash seizure, the conditions imposed on the release of the seized cash, the recovery of funds without adjudication, and the unlawful detention of its director. The petition calls for the proper determination of dues and the appropriate application of the deposited amounts.

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