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2023 (4) TMI 1184 - HC - GST


Issues Involved:
1. Refund of Rs. 2.54 crores to the petitioners.
2. Supply of copies of Panchnama and other resumed documents.
3. Legality of tax deposit under duress during search operations.
4. Compliance with Section 74 of the CGST Act and Rule 142 of CGST Rules.
5. Voluntariness of tax deposit during search operations.

Summary:

1. Refund of Rs. 2.54 crores to the petitioners:
The petitioners sought a direction to the respondents to refund Rs. 2.54 crores, which they claimed was taken without issuing any show cause notice and passing any order. The court noted that the amount was deposited during search operations and argued that it was not voluntary. The court directed the respondents to return the amount along with simple interest at the rate of 6% per annum from the date of deposit till the payment is made. This refund must be completed within 10 days of receiving the certified copy of the judgment.

2. Supply of copies of Panchnama and other resumed documents:
The petitioners requested copies of the Panchnama dated 05.03.2020 and 15.01.2021, along with other electronic gadgets and documents resumed during the search. The respondents provided copies of the Panchnamas and the list of resumed documents during the court proceedings. The court acknowledged this compliance.

3. Legality of tax deposit under duress during search operations:
The court examined whether the tax deposits made by the petitioners during the search operations were voluntary. The court referred to the Delhi High Court's judgment in Vallabh Textiles vs. Senior Intelligence Officer, which held that deposits made during search operations were not voluntary if made under duress. The court concluded that the petitioners' deposits were not voluntary and directed the refund of the amount.

4. Compliance with Section 74 of the CGST Act and Rule 142 of CGST Rules:
The court analyzed the provisions of Section 74 of the CGST Act, which outlines the procedure for voluntary tax payment before the issuance of a show cause notice. The court found that the respondents had not issued any notice under Section 74(1) of the CGST Act within the stipulated time frame. The court also referred to Rule 142(1A) of the CGST Rules, which requires the issuance of Form GST DRC-01A for tax payment. The court held that the respondents could not retain the deposited amount without following these procedures.

5. Voluntariness of tax deposit during search operations:
The court emphasized that the deposit of tax during search operations should be voluntary and free from coercion. The court cited the Delhi High Court's judgment in Vallabh Textiles, which stated that tax deposits made during search operations were not voluntary if made under duress. The court concluded that the petitioners' deposits were not voluntary and ordered the refund of the amount.

Conclusion:
The court allowed the petition and directed the respondents to refund Rs. 2.54 crores to the petitioners along with simple interest at the rate of 6% per annum from the date of deposit till the payment is made. The refund must be completed within 10 days of receiving the certified copy of the judgment.

 

 

 

 

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