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TMI Blog2021 (11) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision is taken, even otherwise, the question of alternate remedy is of no significance, when the eventual direction in the present writ is only for consideration of the refund application - the learned counsel for the petitioner has fairly submitted that the eventual remedy that the petitioner is seeking insofar as refund application is, a direction to consider the application de hors the investigation being carried out and in light of such stand, it cannot be stated that the statutory remedy of refund would displace the petitioner from the present proceedings and the petition is to be dismissed on such ground. Self-ascertainment under Section 74(5) of CGST Act - HELD THAT:- The procedure of self-ascertainment under sub-section (5) of Section 74 contains a scheme that is concluded after following the procedure under sub-sections (6), (7) and (8) of Section 74 of the CGST Act. In the present case, it must be noted that though there is payment of tax and even if it is accepted that payment of tax is also followed by requisite Challan DRC-03, the mere payment of tax cannot be construed to be a payment towards self-ascertainment as contemplated under Section 74 (5) of CGST Act - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund of the amount. Right of Bona fide Tax Payer to be treated with dignity - HELD THAT:- No doubt, the power of investigation cannot be interfered with nor can the court direct investigation be made in a particular manner, however, during all such investigation, it cannot be held that the Fundamental Rights including the right of a bona fide tax payer to be treated with appropriate dignity as enshrined under Article 21 of the Constitution of India would be kept in abeyance. We would not like to elaborate further but to leave it to the wisdom of the respondents as to the manner in which bona fide tax payers are to be treated. Video Recording of Investigation - HELD THAT:- While the respondents would contend that the application is only for installing of CC TV only, the consequential direction that is made in the order dated 20.04.2021 is for video recording. Installation of CC TV as ordered by the Apex Court would taken within itself recording of all that would fall within the range of CC TV - recording of interrogation which direction is limited to maintaining of records relating to interrogation would make it possible as and when circumstances are so made out for summo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails of information collected by the respondents from 'M/s.Greenfinch Team Management Pvt. Ltd. (hereinafter referred to as 'Greenfinch'). The petitioner has also sought for issuance of a writ or order holding Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as 'CGST') / Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as 'KGST') as unconstitutional which prayer is sought without prejudice to the other reliefs. I. CASE AS MADE OUT IN THE PLEADINGS: 2. The facts that are made out by the petitioner is that the petitioner operates an e-commerce platform under the name 'Swiggy' and is registered under the Central Goods and Services Tax Act, 2017. It is stated that the delivery of food is done through delivery partners that include electronic pick-up by those who are engaged by the petitioner. It is specifically stated that during holidays and festive season owing to spike in food orders, the third party service providers are engaged. It is stated that the third party service providers charge consideration for delivery and supply of food alongwith Goods and Services Tax (hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiation of investigation, the petitioner was constrained to seek refund of the amount of ₹ 27,51,44,157/- by way of its letter dated 29.09.2020. 6. It is further submitted that the respondent No.5 having declined to refund the amount collected illegally, the petitioner on 16.12.2020 made out a formal refund application which was filed before the jurisdictional GST Office. 7. The respondents upon notice have appeared and filed their detailed statement of objections and have raised various contentions, including that the entity 'Greenfinch' is a fictitious entity and the petitioner has resorted to wrongful availment of Input Tax Credit on the invoices of 'Greenfinch' without actual receipt of services. 8. It is further submitted that the investigation has been initiated relating to wrongful availment of Input Tax Credit during which it was noticed that 'Greenfinch' so also its suppliers were non-existing entities and in the course of such investigation, summons were issued to the Directors and Officers of the petitioner Company. It is submitted that various offences under Section 132(5) of CGST Act, 2017 have been committed by the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and money was credited to the Electronic Cash Ledger between 6.00 a.m. and 6.30 a.m. 15. It is submitted on behalf of the petitioner that the letter of intimation of payment of ₹ 15.00 Crore had been made out, but as the respondents had objected to the use of the word under protest , finally at 9.42 a.m. on 30.11.2019, the letter was mailed to the DGGI Office asserting that the payment was made 'under protest.' 16. It is also asserted that the petitioner had received calls from DGGI Office for filing of DRC-03 which came to be filed on 02.12.2019. 17. Similarly, as regards the investigation between 26.12.2019 and 27.12.2019, it was submitted that the Directors were summoned and their statements were recorded and on 26.12.2019, that the gates of DGGI Office were locked and the Directors were not permitted to leave the premises till 2.30 a.m. on 27.12.2019. It is further submitted that a sum of ₹ 12,51,44,157/- was deposited in the Electronic Cash Ledger and challans were generated and the Directors were forced to file Form DRC-03, which came to be filed and the process concluded on 27.12.2019 at 1.00 a.m. It is also submitted that the letter was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that, as no show cause notice under Section 74 of CGST Act has been issued and payments of the petitioner has remained with the Department, that the investigation is still not concluded and in light of prolonged investigation, the petitioner has a legitimate right to seek for refund of tax, which would not in any way come in the way of their obligation to honour the demand made after adjudication. 21. The respondents represented through learned Additional Solicitor General have raised various contentions pointing out to the non-existance of 'Greenfinch' and its suppliers and have also asserted that the investigation is such that no fetters are required to be put on the power of investigation. 22. It is asserted that the question of exercise of coercion is not made out. The payments even as per the communication of the petitioner was made as a goodwill gesture and that the payments made are to be construed as payment of tax in furtherance of self-ascertainment as contemplated under Section 74(5) of the CGST Act. 23. Insofar as the specific assertion regarding the locking of premises, it was submitted that the closing down of premises was only in order to secure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al/legal conclusion separately. Cooperation of M/s. Greenfinch is not a relevant issue in respect of Section 74 proceedings against M/s.BTPL. 4. Under these circumstances, it is too early and naive to presume that M/s.BTPL have not wrongfully availed/utilised ITC and have not committed an offence. Pending issuance of notice under Section 74 of CGST Act, 2017 claiming refund of the deposits made during the course of investigation appears to be not only premature, but also not in line with the provisions of Section 54 of the ibid Act. Clearly the said communication would reveal that the Department has merely asserted that the claim for refund is premature, as the same is made during the course of investigation. 28. Apart from construing the communication at Annexure-A dated 13.10.2020 to be one of deferment of refund, it is pointed out by the learned counsel appearing for the petitioner that in the event the petition is to be allowed, their only relief would be an appropriate direction to have their refund applications processed as per law and mere pendency of the investigation according to them would not entail the retention of amount. It must also be noted that even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion arising out of public law functions on the part of the State or its authorities, access to justice by way of a public law remedy under Article 226 of the Constitution will not be denied. (Vide Sanjana M. Wig v. Hindustan Petroleum Corpn. Ltd. [(2005) 8 SCC 242] ) We are therefore of the view that reliance upon Suganmal [AIR 1965 SC 1740] was misplaced, to hold that the writ petition filed by the appellant was not maintainable. 29. As rightly pointed out by the Apex Court, the power of the High Court to issue appropriate direction directing refund either where assessment was without jurisdiction or where tax was collected without authority of law is vested in the High Court and there is a difference between existence of power and exercise of such jurisdiction which depends on facts of the case on hand. If the court does come to a conclusion that the collection of amount which even if were to be taxes, is without authority of law, the court possesses the power to issue appropriate direction upon determination of the validity of collection of amount/tax as being illegal to issue appropriate directions. The mere fact that application has been made for refund doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lised by reason of fraud or any wilful-misstatement or suppression of facts.- (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice. (2) xxx (3) xxx (4) xxx (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. (6) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. Upon such ascertainment as contemplated under sub-section (5) of Section 74 of CGST Act, further legal procedure is contemplated to complete such process of ascertainment as contained in the provision. Section 74 includes sub-section (6) which provides for proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable. Under sub-section (7) of Section 74, the 'proper officer' is at liberty if he concludes that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue a notice as provided under sub-section (1) in respect of amount which falls short of the amount actually payable. Sub-section (8) of Section 74 provides that the person chargeable with tax under sub-section (1) pays the said tax along with interest and penalty within the time prescribed, and all proceedings in respect of the notice shall be deemed to be concluded. 35. Accordingly, it is clear that the procedure of self-ascertainment under sub-section (5) of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of self-ascertainment is liable to be rejected. C. Amount paid under coercion: 39. The Directors of the petitioner Company in response to the summons issued under Section 70 of the CGST Act appeared before the Authorities at 20.00 hours on 28.11.2019 and were there till 4.00 a.m. on 29.11.2019 (as per para-13 of the statement of objections of respondent Nos.3 to 6 filed on 24.03.2021). 40. The investigation is stated to have resumed at 2.00 p.m., on 29.11.2019 and continued till 5.00 a.m., of 30.11.2019 (para 15 of the aforesaid objections). It is relevant to note that ₹ 15.00 crore was paid on 30.11.2019 and a letter was addressed to the Authorities on 30.11.2019 and served on the Authorities on 02.12.2019 that payment was being made under protest. 41. As a part of further investigation, the Directors of the petitioner Company were asked to appear by way of summons and in response to the same, the following persons appeared before the Authorities on 26.12.2019 as follows:- a) Sriharsha Majety at 11.00 hours b) Rahul Jaimini at 14.00 Hours c) Sri Obul Lakshmi Nandan Reddy at 16.00 hours The proceedings have extended till 2.30 a.m. on 26.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le considering the time at which the amount was deposited in the Cash Ledger and the date of deposit, it would indicate that amounts were paid during times when there was no legal obligation to make payment. 46. No doubt, at the hearing of the matter, the Additional Solicitor General asserts fairly that authorization for arrest was absent and gates were closed from inside only to restrict entry of unauthorised persons from outside and for the safety of case records (Affidavit of R.1 to R.6 dated 29.07.2021). Such justification cannot amount to negation of the apprehension in the mind of the petitioner of probable arrest as the authorities themselves have taken the stand that the petitioners by wrongful availment of I.T.C. for ₹ 27.50 Crores had committed non-bailable offences under Clause (c) r/w Clause (b) of Section 132 of CGST Act, 2017. As rightly contended and pointed out by the learned counsel for petitioner that they were unaware that the authorization that was made over to the appropriate investigating authorities had excluded power of arrest. The manner in which investigation was carried out in late hours of the night and the early hours of the morning with physic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (8) G.S.T.L. 112 (Raj.), in the reply to show cause notice, the Respondent assessee had accepted the excess stock and that he had no explanation to offer, the said admission was sought to be retracted before the appellate authority. However, in the present case there is no such statement admitting any lapse on their part and infact the deposit was made while clarifying that it would not amount to admission of liability as per the letter dated 30.11.2019. Accordingly, the above Judgment cannot be made applicable to the present facts. 50. The Judgment in S.I. Property Kerala Pvt Ltd. v. Commr. of C. EX., Cus. S.T. and C.T., Thiruvananthapuram - 2019 (29) G.S.T.L. 632 (Ker.) was rendered in the context of an application for refund being made after the period of limitation prescribed under Section 11B (1) of the Central Excise Act, 1944, by virtue of which amount received had lost the colour of tax. The payment of service tax was made between 27.08.2012 and 06.03.2013. The application for refund was filed on 23.10.2014 after the period of one year. The refund was required to be claimed within the period of one year in terms of Section 11B(1) of the Central Excise Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce them in making payments which the citizens were not legally obliged to make. If any money is due to the Government, the Government should take steps but not take extra legal steps or manoeuvre.... 53. It must be noted that filing of return and payment of substantial taxes by the petitioner would clearly warrant for treating such tax payers with certain element of dignity. The details of tax paid during the relevant period of time speaks for itself. Period Tax paid through ITC Tax paid in cash Total tax Jul 2017 - Mar 2018 58,83,73,787 38,53,44,490 97,37,18,277 2018-2019 2,83,88,86,686 1,06,23,32,105 3,90,12,18,791 2019-2020 4,91,19,25,183 3,79,01,08,499 8,70,20,33,682 2020-2021 (excl.Mar 21 2,12,87,99,829 2,02,52,72,569 4,15,40,72,398 Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Court in the case of Paramvir Singh Saini v. Baljit Singh and Others reported in [(2021) 1 SCC 184], in particular, directions at Para 19 which reads: 19. The Union of India is also to file an affidavit in which it will update this Court on the constitution and workings of the Central Oversight Body, giving full particulars thereof. In addition, the Union of India is also directed to install CCTV cameras and recording equipment in the offices of: (i) Central Bureau of Investigation (CBI) (II) National Investigation Agency (NIA) (iii) Enforcement Directorate (ED) (iv) Narcotics Control Bureau (NCB) (v) Department of Revenue Intelligence (DRI) (vi) Serious Fraud Investigation Office (SFIO) (vii) Any other agency which carries out interrogations and has the power of arrest. As most of these agencies carry out interrogation in their office (s) CCTVs shall be compulsorily installed in all offices where such interrogation and holding of accused takes place in the same manner as it would in a police station. It becomes clear that the Union of India has been directed to install CCTV in all the offices where interrogation is being ..... X X X X Extracts X X X X X X X X Extracts X X X X
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