2021 (10) TMI 44 - HC - GST

Validity of correction of tax - refund of tax - self assessment of tax under Section 74(5) of the CGST Act cannot also have a remedy under Section 107 of the GST Act - HELD THAT - Issue Notice returnable on 08.10.2021. Direct service qua respondent no.2 is permitted.

Summary

Issues:
Challenge of tax correction and refund claim based on coercive recovery and guidelines violation.

Analysis:
The petitioner challenged the tax correction and sought a refund of ?70,00,000 paid through DRC-03, claiming it was coercive recovery and a circumvention of court guidelines. The petitioner's counsel cited a Telangana High Court case where it was held that no tax demand should be raised during an ongoing investigation, which was the situation in this case as well. Additionally, the counsel argued that self-assessed tax payment under Section 74(5) of the CGST Act does not fall under the remedy of Section 107 of the GST Act, as the appellate authority's action can only be determined post adjudication and a specific demand.

The Honorable Ms. Justice Sonia Gokani issued a notice returnable on 08.10.2021, allowing direct service to respondent no. 2. The judgment highlighted the importance of following due process and ensuring that tax demands are not raised during ongoing investigations. The court's decision to issue a notice indicates a willingness to hear the petitioner's arguments and evaluate the validity of the tax correction and refund claim in light of the legal provisions and court guidelines. The case demonstrates the court's commitment to upholding the principles of natural justice and fair adjudication in tax matters.