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TMI Blog2022 (3) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... dy under law for refund of the amount under Section 54 of the CGST Act, 2017 read with provisions of Chapter X of the CGST Rules, 2017. Even if the respondent has forced the petitioner's client to pay the tax directly into the petitioner's Electronic Liability Register, the amount has not been appropriated or debited towards tax, interest, penalty, late fee or any other amount. The amount is to be debited at a future date towards tax liability of the petitioner. Even, if the petitioner's client was asked to pay the amount into the aforesaid Electronic Liability Register, the amount has not been debited towards any tax liability or penalty under the Act. If the amount has to be refunded, it has to be refunded in accordance with provisions of the Act. Considering the fact that the respondent is investigating, the case, which commenced during the month of August-September, 2021, respondent is directed to complete investigation within a period within a period of 3 months from today and issue appropriate Show Cause Notice under Section 73 or 74 of CGST Act, 2017 - the amount lying in the Electronic Liability Register of the petitioner can be refunded only the manner in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tstanding to be directly paid into the petitioner's aforesaid GSTN Account bearing No. GSTN : 33ASMPS4462L1Z6. 4. It is the case of the petitioner that this letter was obtained under coercion and therefore, the amounts which is lying in the electronic ledger of the petitioner has hampered with day-to-day business of the petitioner inasmuch as it has resulted in a liquidity crunch and the petitioner is unable to pay either to the suppliers or pay salary to the employees. 5. It is further submitted that after the proprietor of the petitioner was arrested on 01.09.2021, this writ petition was prepared on 07.09.2021 and filed on 09.09.2021 and thus, the petitioner has withdrawn the statement immediately. It is the case of the petitioner that as per letter dated 01.09.2021, the amount which the said customer was to pay the amount directly into the GSTN Account of the petitioner has been resiled/retracted in the affidavit filed in support of the present writ petition. 6. It is further submitted that the petitioner was under judicial custody till 31.10.2021 and was released only after the expiry of the statutory period of remand under Section 167 (2) of Cr.P.C. 7. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Chattisgarh High Court in the following two cases: 1) New India Civil Erectors Pvt. Ltd., Vs. Union of India reported in 2020 (43) G.S.T.L. 17(Bom.). 2) S.Kumar's Associates Vs. Addl. Commr. (Prev.) of Cus., C.Ex. S.T., Bilaspur reported in 2020 (38) G.S.T.L.29(Chattisgarh). 10. Defending the action of the petitioner, the learned counsel for the respondent submits that under the provisions under the CGST Act, 2017 there is a special dispensation and therefore, the decisions cited by the learned counsel for petitioner are not of no relevance. The learned counsel for respondent submitted that the petitioner has himself admitted and had given a voluntary statement on 31.08.2021 and 1.09.2021 and had further sent a request to one of the customers namely Nobal Tech Industries Pvt. Ltd., to directly remit the amounts due into petitioner's GST Account having GSTN : 33ASMPS4462L1Z6. That apart, the learned counsel for respondent further submits that the statement has also been obtained from one Joseph Selvaraj, who is the partner of M/s Coral Steel having business in Chennai, wherein, he has admitted that he prepared fake GSTN Bills and Invoices to facilitate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. State of Himachal Pradesh and Ors. MANU/SC/0293/2021 iii. Sri Marg Human Resources Pvt. Ltd. Vs. The Principal Additional Director General and Ors. Order in W.P. No.11284 of 2021 dated 26.05.2021. iv. The Principal Additional Director General and Anr. Vs. Sri Marg Human Resources Pvt. Ltd. v. P.V. Ramana Reddy and Ors. Vs. Union of India MANU/TL/OO64/2019 14. The learned counsel for the respondent submits that since under Section 79 of the of the CGST Act, 2017 there is a special dispensation for the Department to initiate such recovery proceedings even before there is a proper determination of tax liability, the writ petition filed for the relief is devoid of merits. 15. By way of rejoinder, the learned counsel for the petitioner submits that power under Section 79 of CGST Act has to be exercised only after there is a proper determination of tax liabilities under Chapter XV of the CGST Act. If the Department wants to resort provisional attachment, the only method prescribed is under Section 83 of the aforesaid Act. 16. The learned counsel for the respondent submits that the writ petitioner has admitted that the petitioner's brother ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Article 226 of the Constitution of India. For claiming refund of any amount lying in excess the petitioner has to work out the remedy under Section 54 of the CGST Act, 2017. Section 54 of the CGST Act, 2017 reads as under: Section 54. Refunds; Any Person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed: Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-Section (6) of Section 49, may claim such refund in the return furnished under Section 39 in such manner as may be prescribed. 23. To implement the aforesaid scheme, under Chapter X has been framed under CGST Rules, 2017. The Hon'ble Supreme Court in the case of Radhakrishnan Industries Vs. State of Himachal Pradesh and Ors., (2021) 6 SCC 771 while dealing with the provisions of the Himachal Pradesh Goods and Service Tax Act, 2017 and Rule 159 dealing with provisional attachment of property of the Himachal Pradesh Rules, 2017 framed and certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortunity of being heard; (x) The Commissioner is duty bound to deal with the objections to the attachment by passing a reasoned order which must be communicated to the taxable person whose property is attached; (xi) A final order having been passed under Section 74 (9), the proceedings under Section 74 are no longer pending as a result of which the provisional attachment must come to an end; and (xii) The appellant having filed an appeal against the order Under Section 74 (9), the provisions of Sub-Section 6 and 7 of Section 107 will come into operation in regard to the payment of the tax and stay on the recovery of the balance as stipulated in those provisions, pending the disposal of the appeal. 24. As per Rule 86(1) Electronic Credit Ledger shall be maintained in FORM GST PMT-02 for each registered person eligible for input tax credit under the Acton the common portal and every claim of input tax credit under the Act shall be credited to the said ledger. As per Rule 86 (2) The electronic credit ledger shall be debited to the extent of discharge of any liability in accordance with the provisions of Section 49. (3) Where a registered person has claimed refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed straight away in this proceedings. 29. At the same time, the invocation of Section 79(1)(c) at the moment is pre-mature. Recovery under Section 79 of the Act has to be in accordance with Chapter XVIII of CGST Rules, 2017. Recovery under Section 79(1)(c) of the Act has to be in consonance with Rule 145 of the CGST Rules, 2017. For an easy refer, both the provisions are re-produced below:- Section 79(1)(c) of the Act Rule 145 of the Rules 79. (1) Where any amount payable by a person to the Government under any of the provisions of this Act or the rules made thereunder is not paid, the proper officer shall proceed to recover the amount by one or more of the following modes, namely: (a) .......... (b) ......... (c) (i) the proper officer may, by a notice in writing, require any other person from whom money is due or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the Government either forthwith upon the money becoming due or being held, or within the time specified in the notice not being before the money becomes due o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uire the person on whom the notice has been served to pay to the Government any such money or part thereof; 145. Recovery from a third person.- (1) The proper officer may serve upon a person referred to in clause (c) of subsection (1) of section 79 (hereafter referred to in this rule as -the third person?), a notice in FORM GST DRC-13 directing him to deposit the amount specified in the notice. (2) Where the third person makes the payment of the amount specified in the notice issued under sub-rule (1), the proper officer shall issue a certificate in FORM GST DRC14 to the third person clearly indicating the details of the liability so discharged. 30. The figures given in the counter affidavit regarding the alleged evasion of tax liability on the strength of bogus invoice is mind-boggling and shows inherent weakness in the system and how the system is capable of being manipulated and systematically abused by unscrupulous person. The respondent has to strengthen Rules and plug the loop holes so that, such evasion and leakage of tax do not take place in future. The case laws cited by the learned counsel for the petitioner are irrelevant. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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