Smruti Waghdhare v. Joint Director, Directorate General of GST Intelligence & Ors.
Bombay High Court | Writ Petition No. 839 of 2025 | 2026:BHC-OS:6209-DB | Decided on 10.03.2026 | Coram: Justice G. S. Kulkarni & Justice Aarti Sathe
Background
The Petitioner challenged seizure orders issued under Form GST INS-02, whereby cash amounting to ₹1 crore—₹60 lakh from her premises and ₹40 lakh from her parents’ residence—was seized during searches conducted by DGGI. The Petitioner contended that Section 67(2) of the CGST Act did not authorise such seizure and that the Department had failed to record the required “reasons to believe.”
Issue
Whether the GST authorities could seize cash under Section 67(2) of the CGST Act without recording reasons to believe that the cash was useful or relevant to proceedings under the Act.
High Court's Reasoning and Decision
The High Court held that “reason to believe” is the foundation of the power of seizure under Section 67(2). The authorities had failed to record reasons establishing that the seized cash was useful or relevant to proceedings under the CGST Act. The Court further held that Section 67(2) did not confer power to seize cash in the circumstances of the case.
The Court also noted that no notice under Section 67(7) had been issued within six months of seizure, making the cash liable to be returned.
Accordingly, the High Court quashed the seizure orders and directed the Respondents to release the entire ₹1 crore to the Petitioner, along with applicable interest, within two weeks.
(Above brief of the judgement prepared by Ms. Shweta Singh, Advocate, Dated: 12 Aug 2026)