9911796707
Advanced Search 
TMI Blog2022 (12) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... , however, contend to the contrary. 4.1 It is the official respondents/revenue's broad stand, that the aforementioned amount was deposited against challan(s) submitted in the prescribed form i.e., Form GST DRC-03, each of which is dated 17.02.2022. 5. The official respondents/revenue, thus, take the position, that the allegation of coercion is an afterthought, which was raised only on 25.05.2022 after summons had already been served on the petitioner- concern. 6. The principal controversy in the matter was noticed, when the matter was listed before the Court for the first time on 05.07.2022. On that date, notice was issued in the petition. The official respondents/revenue were represented by Mr Satish Kumar, senior standing counsel who appeared on behalf of respondents no. 1 and 2, and Ms Anushree Narain, who appeared on behalf of respondent no.3. 7. It is pertinent to note, at this juncture, that on the returnable date i.e., 26.08.2022, Mr Vivek Sarin, who appears on behalf of the petitioner- concern confined the relief sought in the writ petition to prayer clause (a), which concerns, in effect, the relief for return of Rs.1,80,10,000/- along with statutory interest, deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such transactions. 15. It appears, that the officers carrying out the search, apart from the laptop, also resumed various registers, physical bill books and documents, which according to them, contained details of clandestine clearances made by the petitioner-concern. 16. Evidently, a panchnama was drawn on 17.02.2022, which bears the signatures of Mr Sumit Jain, and two other persons i.e., one Mr Deepak Kumar Jha [pancha no.1] and one Mr Anil Kumar [pancha no.2], who the official respondents/revenue claim, were independent witnesses to the search proceedings. 17. The official respondents/revenue also aver, that simultaneous searches were carried out at the premises of NE and EAPL, whose goods, as indicated above, were allegedly sold, in cash, by the petitioner-concern. 17.1 It is stated, that the search at the premises of NE and EAPL was carried out on 16.02.2022. 18. Apparently, statements of the proprietor of NE i.e., one Mr Kamal Kishor Karnani, and the Director of EAPL, namely one Mr Vinod Baid were recorded. 18.1 These statements, as per the official respondents/revenue, confirm that the aforementioned entities had their goods sold in cash via the petitioner-concern, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct Taxes and Customs, GST-Investigation Wing. 22.6 The deposit made during the search was in contravention of the provisions of Rule 142(1A) and 142(2) of the Central Goods & Service Tax Rules, 2017 [hereafter referred to as "2017 Rules"]; the assertion being that there was no notice issued by the proper officer, ascertaining the tax, interest and penalty payable by the petitioner-concern, as envisaged under sub-rule (1A) of Rule 142; and if it is to be assumed, for the sake of argument, that the petitioner-concern's representative made an ascertainment on his own concerning tax, interest and penalty that was required to be paid, upon payment being made, the proper officer was obliged in law to issue an acknowledgement qua the same in the prescribed form i.e., GST DRC-04 as stipulated in sub-rule (2) of that very rule i.e., Rule 142. 22.7 The deposit of the aforementioned amount, if construed as having been preceded by self-ascertainment, a show-cause notice cannot possibly be issued. The petitioner-concern's representatives are, however, repeatedly being summoned, for enquiries and/or investigations. 22.8 These actions taken on behalf of the official respondents/revenue are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner concern voluntarily on 17.02.2022. 23.3 The objection concerning the deposit of the aforementioned amount was taken only after the second summon was issued i.e., summon dated 13.04.2022. The retraction of the statement made by Mr Sumit Jain, along with the other documents, was communicated after more than a month of the summon dated 13.04.2022 being issued i.e., on 25.05.2022. Analysis and reasons: 24. Having heard the learned counsel for the parties, it is quite evident, that the issue at hand can only be determined, having regard to the circumstances in which the aforementioned amount was deposited. 24.1 In this context, one would have to bear in mind, the safeguards, that the law has put in place. 25. The 2017 Act and the 2017 Rules made therein, do make provisions for enabling a person chargeable with tax to pay tax, along with interest, before being served with a notice for payment of tax, which either has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilized for any reason.1 25.1 Thus, if the person chargeable with tax takes recourse to such a route, the proper officer is restrained from serving any noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Recovery". 30. Sub-rule (1) of Rule 142 of the 2017 Rules makes a provision for service of notice for raising a demand for recovery of tax; a provision which we are not concerned with in this matter, as it is not the case of the official respondents/revenue that a notice was served. 30.1 Besides this, the two sub-rules which are, perhaps, relevant are sub-rule (1A) and (2) of Rule 142, as they relate to the steps required to be taken before service of notice on the person chargeable with tax, interest and penalty under sub-section (1) of Section 73, or under sub-section (1) of Section 74 of the 2017 Act. 31. Under sub-rule (1A) of Rule 142 of the 2017 Rules, where a proper officer, before service of notice under Section 73(1) or Section 74(1) of the 2017 Rules seeks to communicate details of tax, interest or penalty, he is required to do so in the prescribed form i.e., via Part A of Form GST DRC-01A.8 31.1 Where, however, before service of notice or statement, the person chargeable with tax, based on self-ascertainment, seeks to make payment of tax and interest, in consonance with the leeway given under sub-section (5) of Section 73 [which relates to cases not involving fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (5) of Section 74. 36. As noted above, if the payments/deposits were voluntary, then an acknowledgement of having received the payment should emanate from the proper officer, as mandated in the prescribed form i.e., GST DRC-04, as prescribed under sub-section (2) of Rule 142 of the 2017 Rules. 36.1 The official respondents/revenue, in our opinion, have not been able to discharge this burden. 37. The malaise of officials seeking to recover tax dues (in contrast to voluntary payments being made by assesses towards tax dues) during search, inspection or investigation was sought to be addressed by the GST- Investigation, CBIC via Instruction No. 01/2022-2023 dated 25.05.2022. For the sake of convenience, the said instruction is extracted hereafter: "Date:25th May, 2022 Instruction No. 01/2022-23 [GST - Investigation] Subject: Deposit of tax during the course of search, inspection or investigation- reg. 1. During the course of search, inspection or investigation, sometimes the taxpayers opt for deposit of their partial or full GST liability arising out of the issue pointed out by the department during the course of such search, inspection or investigation by furnishing DRC-03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery' of tax dues during the course of search or inspection or investigation proceedings. However, there is also no bar on the taxpayers for voluntarily making the payments on the basis of ascertainment of their liability on non-payment/ short payment of taxes before or at any stage of such proceedings. The tax officer should however, inform the taxpayers regarding the provisions of voluntary tax payments through DRC-03. 5. Pr. Chief Commissioners/ Chief Commissioners, CGST Zones and Pr. Director General, DGGI are advised that in case, any complaint is received from a taxpayer regarding use of force or coercion by any of their officers for getting the amount deposited during search or inspection or investigation, the same may be enquired at the earliest and in case of any wrongdoing on the part of any tax officer, strict disciplinary action as per law may be taken against the defaulting officers. (Vijay Mohan Jain) Commissioner (GST-Inv.), CBIC" 38. It appears that this Instruction was issued by the GST-Investigation Wing, CBIC, in the backdrop of an order dated 16.02.2021, passed by the Gujarat High Court in the matter of Bhumi Associate v. Union of India MANU/GJ/0174/202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place by the Act, Rules and by the Court, to ensure that unnecessary harassment is not caused to the assessee, required adherence by the official respondents/revenue, as otherwise, the collection of such amounts towards tax, interest and penalty would give it a colour of coercion, which is not backed by the authority of law. 40. In this case, the argument of Mr Kumar, that the objection concerning the amounts deposited was raised only after the summon dated 13.04.2022 was issued, in our opinion, would not help the cause of the official respondents/revenue. The reason is, that if a procedure is prescribed under a statute or by law, that is, via dicta contained in a judgment, it has to be followed to the tee. 40.1 Failure to follow the prescribed procedure will, as in this case, have us conclude that the deposit of tax, interest and penalty was not voluntary. 41. The reason that the officers of the official respondents/revenue have been asked, perhaps, to have the amounts deposited the day after the search is concluded, is, to also give space to the concerned person to seek legal advice, and only thereafter deposit tax, interest and penalty, wherever applicable, upon a proper self ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
