Cash Not 'Goods' Under GST; Authorities Cannot Seize It Without Evidentiary Link: Calcutta High Court

The Calcutta High Court reiterated that cash does not fall within the definition of “goods” under the Goods and Services Tax (GST) law and, therefore, GST authorities have no power to seize cash unless it is directly relevant to proceedings under the Act.

A bench comprising Justice Om Narayan Rai referred to Section 2(52) of the CGST Act, which expressly excludes money from the definition of “goods.” 

The court observed, "A perusal of the said definition clearly reveals that money stands excluded from the purview of goods."

Referring to Section 67(2), the Court observed that GST authorities can seize only goods, documents, or things that are useful or relevant to proceedings under the Act and, therefore, cannot seize or seal cash unless it has specific evidentiary relevance.

In the present case, the GST authorities conducted a search and seizure operation at the office-cum-residential premises of Pushpa Furniture. During the search, cash amounting to Rs. 24 lakh was sealed, treating it as unaccounted money allegedly linked to the clandestine supply of taxable goods without invoices.

Appearing for Pushpa, the counsel argued that the entire search and seizure operation was illegal as the GST INS-0, which is the authorisation issued for the search, issued by the authorities, did not disclose any “reason to believe”, which is a mandatory precondition for authorising inspection, search or seizure under the GST law.

It was further contended that no independent witness was present during the search and seizure. Instead, signatures of departmental employees were obtained, who cannot be treated as “independent witnesses” within the meaning of Section 67(10) of the CGST Act.

On the other hand, counsel for the GST authorities submitted that since the retention of cash amounting to Rs. 24 lakh was found to be suspicious, the matter had already been intimated to the Income Tax Department, and, therefore, the action of sealing the cash was justified.

Applying the ratio laid down by the Delhi High Court in Commissioner of CGST v. Deepak Khandelwal (2023) the Court held that cash or other assets representing unaccounted wealth, which are not required in specie for the purpose of any proceedings, cannot be seized under Section 67 of the CGST Act.

The Bench held that the action of the GST authorities in seizing and sealing the cash, while leaving it in the custody of the petitioner, was beyond their statutory powers.

“...this court finds that the action of the respondent GST authorities in seizing cash and sealing the same in the custody of the petitioners is beyond the power domain of the GST authorities in the facts of the present case.

The Court further noted that the authorities had failed to demonstrate how the seized cash was relevant or necessary for any ongoing or future proceedings.

Accordingly, the Court directed the department to de-seal the cash.

Citation: 2026 LLBiz HC (CAL) 11

Case Title: Puspa Furniture Pvt. Ltd. & Anr. v. Union of India & Ors.

Case Number: WPA 19155 of 2025

Counsel for Petitioner: Advocates, Himangshu Kumar Ray, Subhasis Podder, Sushant Bagaria, Gaurav Chakraborty, Animitra Roy

Counsel for Respondent: Advocates Hasi Saha, for Union of India, N. Chatterjee, Tanoy Chakraborty, S. Sanyal for the State, Prithu Dudhoria for respondent no. 9; and Bhaskar Prosad Banerjee, Abhradip Maity, for the Siliguri CGST authorities