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TMI Blog2021 (4) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... d and arrived at the position that the self-ascertainment by the assessee is inadequate. However, statement recorded at the time of search admitting GST liability and setting the scheme of instalments have been retracted by the petitioner on 05.11.2019 and the petitioner has consistently and vehemently been contested the liability to tax. With this, the requirement of ascertainment under Section 74(5), fails. The ascertainment contemplated under Section 74(5) is of the nature of self-assessment and amounts to a determination by it which is unconditional, and not one that is retracted as in the present case. Had such ascertainment/self-assessment had been made, there would be no further proceedings contemplated, as Section 74(6) states that with ascertainment of demand in Section 74(5), no proceedings for show cause under Section 74(1) shall be issued. In this case, enquiry and investigation are on-going, personal hearings have been afforded and both the parties are fully geared towards issuing/receiving a show cause notice and taking matters forward. The mandamus as sought for by the petitioner is granted. The amount of ₹ 2.00 crores collected shall be refunded to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2019 - ₹ 1,00,00,000/- 07.11.2019 - ₹ 1,00,00,000/- 13.11.2019 - ₹ 1,00,00,000/- 20.11.2019 - ₹ 1,00,00,000/- 27.11.2019 - ₹ 1,00,00,000/- 04.12.2019 - Balance amount as quantified by the GST Department 4. This undertaking has been signed by the Managing Director on 22.10.2019. In line with the undertaking, the petitioner has, on the same day remitted a sum of ₹ 1 crore in FORM GST DRC-03 corresponding to Rule 142(2) and (3) and Section 74(5) of the Act. The second installment of the tax was paid on 30.10.2019. 5. However, on 05.11.2019 the Managing Director of the petitioner has retracted his statement in the following terms: To The Office of Senior Intelligence DGGI, Regional Unit, No.5, Williams Road, Melapudur Cantonment, Tiruchirappalli 620 001 Tamil Nadu Respected Sir, Sub: Search conducted at our premises on 22-10-2019 Reg Ref: Mahazar dated 22-10-2019 This has reference to the search proceedings conducted by your Ld. Authority at our premises at No.270, Narasimman Road, Shevapet, Salem, Tamil Nadu 636 002 on 22-10-2019, wherein we would like to retract the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... high handedness, but also malafides is attributed in the conduct of the proceedings. 7.The aforesaid allegations have been strenuously denied by the respondents. According to the respondents, the petitioner has been engaging in large scale tax evasion and has not been paying tax that it is legitimately bound to pay. It was for this reason that it had voluntarily offered to remit tax. The very fact that the petitioner had remitted not one but two instalments of tax would reveal that the payments were voluntary as, if they had been coerced as alleged, the payments would have stopped with the first instalment. They would also state that there has been no co-operation extended by the petitioner in the proceedings for enquiry and no appearances/compliance with the summons issued and it is for this reason that the proceedings for investigation are being delayed. 8.As far as the investigation is itself concerned, I had passed an order on 17.12.2020 recording the agreement of both parties to the effect that the investigation could continue on three days i.e. 29.12.2020, 30.12.2020 and 31.12.2020 and the petitioner will appear and co-operate in the conduct of the enquiry. There has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CGST rates for Goods. This affidavit is filed before the Assessing Officer and not the jurisdictional Commissioner and Mr.Sundareswaran would contend that the Statute specifically requires that such affidavit be filed only before the Jurisdictional Commissioner, thus disentitling the petitioner to any benefit thereunder. 11. This is a matter of assessment and the veracity or otherwise of the affidavit filed by the petitioner on 29.09.2017 will have to be tested by the Assessing Authority in the course of the assessment itself. 12. The legal issue raised is as to whether the petitioner is entitled to the refund of the amounts paid during investigation and the revenue relies upon the provisions of Section 74(5) of the Act. It would be relevant, in this context, to understand the Scheme of assessment as set out under Section 74 and for this purpose, I extract Section 74 in full below: 74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilfulmisstatement or suppression of facts. (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (8) Where any person chargeable with tax under sub-section (1) pays the said tax along with interest payable under section 50 and a penalty equivalent to twentyfive per cent. of such tax within thirty days of issue of the notice, all proceedings in respect of the said notice shall be deemed to be concluded. (9) The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order. (10) The proper officer shall issue the order under sub-section (9) within a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund. (11) Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded. Explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee may, prior to receipt of notice under sub-section (1), pay the tax along with interest under section 50 and penalty equivalent to 15% of such tax, on the basis of a self-ascertainment or as ascertained by the proper officer under information to him. On receipt of the information, sub-section (6) provides that no show cause notice shall be served under section 74(1) in respect of the tax and interest. The provisions of subsection (5) and (6) of Section 74 thus provide an opportunity for the assessee and/or the revenue to ascertain the proper amount of tax, interest and penalty and, even in cases where there might have been a shadow of misdeclaration/short payment of tax or wrongful availment or utilization of ITC, a closure of the proceedings at that stage on the basis of either a self-ascertainment by an assessee and acceptance of the same by the revenue or vice versa. 16. Where there is no such closure as contemplated under sub-sections (5) and (6), sub-section (7) provides for an avenue to the revenue to continue the proceedings. It states that where the proper officer, on receipt of the selfascertainment believes that such ascertainment is incorrect and the amount f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to the person chargeable with tax, interest and penalty, under sub-section (1) of Section 73 or sub-section (1) of Section 74, as the case may be, shall communicate the details of any tax, interest and penalty as ascertained by the said officer, in Part A of FORM GST DRC-01A. (2) Where, before the service of notice or statement, the person chargeable with tax makes payment of the tax and interest in accordance with the provisions of subsection (5) of section 73 or, as the case may be, tax, interest and penalty in accordance with the provisions of sub-section (5) of section 74, or where any person makes payment of tax, interest, penalty or any other amount due in accordance with the provisions of the Act whether on his own ascertainment or, as communicated by the proper officer under subrule (1A),]he shall inform the proper officer of such payment in FORM GST DRC-03 and the proper officer shall issue an acknowledgement, accepting the payment made by the said person in FORM GST DRC 04. [(2A) Where the person referred to in sub-rule (1A) has made partial payment of the amount communicated to him or desires to file any submissions against the proposed liability, he may mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Details of show cause notice, if payment is made within 30 days of its issue Reference No.: N.A. Date Of issue : N.A. 6. Financial Year 2017-2018 7. Details of payment made including interest and penalty, if applicable (Amount in Rs.) Sr. No. Tax Period Act Place of supply (POS) Tax/ Cess Interest Penalty, if applicable Others Total Ledger utilized (Cash/ Credit) Debit entry no. Date of entry 1. JUL 2017-MAR 2018 CGST Tamil Nadu 50,00,000.00 0 0 0 50,00,000.00 cash DC3310190341802 N.A. 2. JUL 2017-MAR 2018 SG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue, the remittances made by the petitioner during investigation in terms of Section 74(5) amount to self- ascertainment . Having remitted two instalments of the tax as per its own ascertainment, it cannot now pray for a mandamus seeking refund of the amount. After all, revenue argues, the petitioner is well aware of the fact that its transactions are liable to tax and any remittances effected would be adjusted against final tax liability. 24. The basis of this argument is flawed as I am not in agreement with the submission that Section 74(5) is a statutory sanction for advance tax payment, pending final determination in assessment. In my view, this is contrary to the scheme of assessment set out under Section 74, as I have noticed in paragraphs 12 to 16 above. 25. The ratio of the decisions relied by the petitioner and several more besides, are to the effect that no collection can be insisted upon prior to a final determination of liability being made. These decisions, in my view, still hold the field. What Section 74(5) provides is the first opportunity to an assessee to pay tax, interest and penalty liability even prior to the issuance of a show cause notice an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any arrest, would arise only when investigation has been completed and on launching the prosecution. If the prosecution is a criminal prosecution, then, there is no question of deviating or defeating from the Criminal Law. The Criminal Law contains several provisions including protective measures, which would enable the Petitioners to resist any arrest, as apprehended. In the scheme of the Criminal Law and particularly the Finance Act, 1994 as well, if it contains any penal provisions, it is not as merely because the investigations are underway that the arrest would be effected. Eventually, all that the Respondents are presently contemplating is to investigate the matter. The Petitioners do not dispute the right to investigate and in accordance with law. That they have already attended the offices of the concerned Respondents and once the statement of the Petitioners was recorded goes without saying that on further summons being issued and on called upon to attend the Officers of the Respondents, they will attend and co-operate in these investigations by producing all the documents and answering the requisite queries, subject, of-course, to their rights in law. It is only when thes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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