Bombay High Court Overturns ₹1 Crore Cash Seizure by GST Officers

The Bombay High Court has ruled against the seizure of ₹1 crore in cash by GST officers, stating that the CGST Act does not authorise such action. This decision highlights the limitations of the GST officers' powers under the current legal framework. 

Legal Basis for the Ruling 

On March 10, 2026, the Bombay High Court, comprising Justices GS Kulkarni and Aarti Sathe, delivered a ruling that quashed the seizure of ₹1 crore in cash by GST officers.  

The court clarified that under Section 67 of the CGST Act, the powers of search and seizure are limited to goods, documents, and books relevant to the proceedings. The Act does not explicitly permit the seizure of cash. 

The case involved Smurti Waghdhare versus the Directorate General of GST Intelligence (DGGI), where the GST officers had seized the cash during a search operation at the petitioner's premises. 

Implications of the Ruling 

The court's decision to quash the cash seizure and order its return with interest underscores the necessity for tax authorities to operate strictly within the confines of the law.  

The ruling also raised questions about the subsequent transfer of the seized cash to the Income Tax Department, which the court found lacked legal backing under the GST law. 

Read More: Income Tax Department Directs Brokers to Deposit Excess STT Collected from Clients! 

Arguments Presented 

Abhishek A Rastogi, representing the petitioner, argued that the GST law does not authorise the seizure of cash during search proceedings. This argument was pivotal in the court's decision, as it highlighted the absence of statutory support for such actions by GST officers. 

Conclusion 

The Bombay High Court's ruling in favour of the petitioner emphasises the importance of adhering to statutory provisions. The decision serves as a reminder to tax authorities to ensure that their actions are supported by the law, particularly in matters involving the seizure of assets. 

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