GST Authorities Cannot Seize Cash Under Section 67(2) of CGST Act: Rajasthan High Court

Overview of the Judgment

The Rajasthan High Court has delivered a significant ruling settling a question that had been agitating GST assessees across the country — whether officers conducting a search under the Central Goods and Services Tax framework possess any statutory authority to seize cash or monetary instruments discovered at the searched premises. Through a common order disposing of a batch of writ petitions led by Shiv Shankar Oil Udyog Vs Additional Director General (Civil Writ Petition No. 3912/2024, decided on 15/04/2026), the Court returned a categorical answer in the negative.

The ruling brings the Rajasthan High Court in alignment with a consistent line of authority from the Delhi, Kerala, Gujarat, Karnataka, Calcutta, and Bombay High Courts, all of which had previously rejected the Revenue's attempt to treat cash as a seizable item under Section 67(2) of the CGST Act, 2017.

Background and Scope of the Batch Petitions

Multiple writ petitions were clubbed together before the Court, each raising the identical legal question: can GST search authorities treat cash found on the premises of an assessee as "goods" or "things" so as to bring it within the seizure power under Section 67(2) of the CGST Act, 2017, or the corresponding provision of the Rajasthan Goods and Services Tax Act, 2017 (RGST Act)?

The relief sought across the petitions included:

  • Return of cash amounting to Rs. 1,10,000/- (in Civil Writ Petition No. 3912/2024)
  • Release of Rs. 40,00,000/- placed in FDR in the name of the Directorate General of Goods and Services Tax (Civil Writ Petition No. 13073/2023)
  • Refund of Rs. 33,00,000/- seized from the assessee (Civil Writ Petition No. 15032/2023)
  • Release of Rs. 32,00,000/- (Civil Writ Petition No. 15420/2023)
  • Refund of Rs. 25,00,000/- in cash and Rs. 9,26,588/- deposited through DRC-03 (Civil Writ Petition No. 15125/2025)
  • Refund of Rs. 25,00,000/- in cash and Rs. 12,50,933/- deposited through DRC-03, along with quashing of a Show Cause Notice dated 06.06.2025 proposing penalty under Section 122(1)(ii) of the CGST Act, 2017 (Civil Writ Petition No. 15134/2025)

Important: The Court confined its adjudication strictly to the legality of seizure of money during a GST search. All other connected issues — including challenges to show-cause notices and allegations of coercive deposits — were expressly left open, particularly given that Sections 107 and 112 of the CGST Act / RGST Act provide an alternative and efficacious appellate remedy against final orders of adjudication.

The Statutory Framework: What Does Section 67(2) Actually Say?

Text of Section 67(2), CGST Act, 2017

The Court reproduced the operative provision as follows:

"Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things:

Provided that where it is not practicable to seize any such goods, the proper officer, or any officer authorised by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer:

Provided further that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act."

The provision thus authorises seizure of:

  1. Goods liable to confiscation
  2. Documents or books or things useful for or relevant to proceedings under the Act

The Revenue's argument hinged on the word "things" in the second proviso, asserting it was wide enough to encompass cash.

Definitions That Govern the Interpretation

Definition of "Goods" Under Section 2(52), CGST Act, 2017

Section 2(52) defines "goods" as:

"every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply."

The exclusion of money and securities from the definition of "goods" is explicit and unambiguous.

Definition of "Money" Under Section 2(75), CGST Act, 2017

Section 2(75) defines "money" as: