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TMI Blog2022 (12) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable, upon a proper self-ascertainment. The aforementioned amounts which were deposited on behalf of the petitioner-concern, lacked an element of voluntariness - the official respondents/revenue are directed to return Rs.1,80,10,000/- to the petitioner-concern, along with interest at the rate of 6% (simple) per annum. The interest will run from 17.02.2022 till the date of payment. The writ petition is disposed of. - W.P.(C) 9834/2022 - - - Dated:- 20-12-2022 - HON'BLE MR JUSTICE RAJIV SHAKDHER AND HON'BLE MS JUSTICE TARA VITASTA GANJU Petitioner Through: Mr Vivek Sarin with Mr Dibya Prashant Singh, Advocates. Respondents Through: Mr. Satish Kumar, Sr. St. Counsel for respondent Nos.1 and 2. Ms. Anushree Narain, Adv. for respondent No.3. [Physical Court hearing/ Hybrid hearing (as per request)] RAJIV SHAKDHER, J. Preface: 1. The sole question which arises for our consideration is: whether the cumulative sum of Rs.1,80,10,000/- deposited on behalf of the petitioner- concern, during search proceedings carried out between 16.02.2022 and 17.02.2022, was a voluntary act or not. 2. The petitioner claims, that the aforementioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rementioned entities by the petitioner-concern were worth Rs.149.90 crores against which it received by way of a commission [at the rate of 5%] Rs.7.50 crores. It is alleged that the commission was also received in cash. 11.1 Thus, according to the official respondents/revenue, the petitioner-concern failed to disclose the said cash transactions, and pay the requisite tax on the commission earned by it. 12. It was because of this intelligence which was received by the official respondents/revenue, that a search at the petitioner-concern's premises was conducted between 16.02.2022 and 17.02.2022. 12.1 The said premises, as per the stand of the official respondents/revenue, was unregistered. 13. It is also the official respondents/revenue s case, that at the time of the search, one Mr Sumit Jain i.e., the manager and authorized representative of the petitioner-concern was found at its premises. 14. The official respondents/revenue claim, that amongst other things, it was discovered that the petitioner-concern maintained a ledger concerning cash sales, albeit in soft form, in a laptop, which was ultimately resumed by them. 14.1 This apart, it is also averred by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following components: (i) Tax at the rate of 18% on the commission earned during the relevant period i.e., Rs.7.49 crores; quantified at Rs.1.35 crores. (ii) Interest amounting to Rs.24,85,000/- (iii) Penalty at the rate of 15% amounting to Rs.20,25,000/-. Submissions of the counsels: 22. Given this backdrop, submissions were advanced by the counsel for the parties. 22.1 On behalf of the petitioner-concern, the submissions made, can be paraphrased as follows: 22.2 The deposit of Rs.1,80,10,000/- was not voluntary. The statements and documents, on which the signatures of Mr Sumit Jain were obtained on 17.02.2022 and 24.02.2022, were a product of coercion. 22.3 Since the copies of documents have not been furnished till today, the official respondents/revenue have contravened the provisions of Section 67(5) of the CGST Act, 2017 [hereafter referred to as 2017 Act ]. 22.4 Between 16.02.2022 and 17.02.2022, when the search was carried out, CCTV cameras were switched off. The enquiry conducted on 24.02.2022 was not backed by camera recording. 22.5 The so-called independent witnesses were connected to the official respondents/revenue. Mr Deepak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is revealed by the flagrant violation of safeguards provided in law. In this context, it is required to be noticed, that when Mr Sumit Jain presented himself before the concerned officer on 24.02.2022, pursuant to the summons dated 22.02.2022, he was detained for several hours, and was allowed to leave only after he had appended his signatures on the documents [trading account, party-wise ledger and pen drive], copies of which were also not provided to the petitioner concern. 22.12 It is in these circumstances, that the petitioner-concern, via letter dated 25.05.2022 indicated to respondent no.1, that statements said to have been made by Mr Sumit Jain, and documents supposedly signed by him, were the result of coercion exerted on him. 23. In rebuttal, Mr Satish Kumar, who appears on behalf of the official respondents/revenue, drew our attention to the assertions made in the pleadings filed in the case, to demonstrate that the petitioner-concern was avoiding payment of tax, by making cash sales, on behalf of NE and EAPL. 23.1 It was emphasized, as noted hereinabove, that Mr Sumit Jain, the authorized representative of the petitioner-concern had accepted that goods were sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer serves a statement containing details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for such periods other than those covered under sub-section (1) of Section 73. 5 27.1 The important aspect to be kept in mind, is that the regime given in Section 73 of the Act operates in cases which do not involve fraud or wilful-misstatement or suppression of facts to evade tax. 28. In cases which involve one or more of the aforementioned ingredients i.e., fraud, wilful misstatement or suppression of facts to evade tax, para materia provisions are contained in Section 74 of the 2017 Act, with small variations. 28.1 In these cases as well, latitude has been given to the person chargeable with tax, to pay monies towards tax, along with interest, based on self-ascertainment, before issuance of notice under sub-section (1) of Section 74 of the 2017 Act, with a caveat that fifteen per cent of such self-ascertained tax is required to be paid by way of penalty. 6 28.2 The penalty amount increases if amounts towards tax and interest are paid by the person chargeable with tax within thirty [30] days of the notice being issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learly, the facts which have emerged, disclose that although payments were made in the prescribed form i.e., GST DRC-03, no document has been placed on record by the official respondents/revenue, demonstrating acknowledgement of having accepted the payment. 32.1 Therefore, the stand taken before us by the official respondents/revenue, that this was a voluntary payment, based on self-ascertainment of tax, interest and penalty, is not established, as the regime incorporated under the provisions of Section 73/74 of the 2017 Act and the 2017 Rules, adverted to hereinabove, has not been adhered to. 33. Besides this, the following circumstances reveal, that the amounts deposited [the cumulative sum being Rs.1,80,10,000/-] did not have an element of voluntariness attached to it. 33.1 There is no dispute, that Rs.1,80,10,000/- was deposited in four (4) tranches in the prescribed format i.e., GST DRC-03, on the dates and at the time set forth hereinbelow: * Rs. 35,00,000/- vide Form GST DRC-03 dated 17.02.2022 at 01:28 AM * Rs. 1,00,00,000 vide Form GST DRC-03 dated 17.02.2022 at 02:15 AM * Rs. 20,25,000/- vide Form GST DRC-03 dated 17.02.2022 at 05:04 AM * Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DRC-03 on GST portal. Such voluntary payments are initiated only by the taxpayer by logging into the GST portal using its login id and password. Voluntary payment of tax before issuance of show cause notice is permissible in terms of provisions of Section 73(5) and Section 74 (5) of the CGST Act, 2017. This helps the taxpayers in discharging their admitted liability, self-ascertained or as ascertained by the tax officer, without having to bear the burden of interest under Section 50 of CGST Act, 2017 for delayed payment of tax and may also save him from higher penalty imposable on him subsequent to issuance of show cause notice under Section 73 or Section 74, as the case may be. 3. It is further observed that recovery of taxes not paid or short paid, can be made under the provisions of Section 79 of CGST Act, 2017 only after following due legal process of issuance of notice and subsequent confirmation of demand by issuance of adjudication order. No recovery can be made unless the amount becomes payable in pursuance of an order passed by the adjudicating authority or otherwise becomes payable under the provisions of CGST Act and rules made therein. Therefore, there may not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RC-03, the assessee should be asked/ advised to file such Form DRC-03 on the next day after the end of search proceedings and after the officers of the visiting team have left the premises of the assessee. (3) Facility of filing [a] complaint/ grievance after the end of search proceedings should be made available to the assessee if the assessee was forced to make payment in any mode during the pendency of the search proceedings. (4) If complaint/ grievance is filed by assessee and officer is found to have acted in defiance of the afore-stated directions, then strict disciplinary action should be initiated against the concerned officer. 38.1 It is important to note, that while in line with the directions contained in Bhumi Associate, the aforementioned Instruction i.e., Instruction No. 01/2022-2023 dated 25.05.2022 inter alia, provides, as noticed above, that no recovery of tax should be made during search, inspection or investigation unless it is voluntary- it does not elaborate on various modes for collection adopted in such circumstances, for example via cheque, cash, e-payment or even via adjustment of input tax credit. 39. Furthermore, the Instruction fal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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