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TMI Blog2023 (3) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing registration No. 24AARFS7953BIZX. 3. On 11th February, 2022, a search and seizure operation was carried out by the team of the CGST officials. On 12th February, 2022 at about 1.00 a.m. respondent No.1 reversed the ITC in the electronic credit ledge and corrosively and illegally filed Form DRC- 03 under Section 74(5), although it was not voluntary. According to the petitioner, there is no tax evasion on the part of the petitioner-firm and there arises no question of admitting any wrong doing. 4. Retraction affidavit had been filed on 18th February, 2022 by the petitioner and the representations have been made for the refund of amount of ITC. According to the petitioner, he purchased Molasses from sugar factories and received invoices permit an E-way bills and the same is sold to various Dairies after getting permission from the Prohibition Department along with bill and E-way bill generated by the petitioner's firm. The transportation is being done by M/s. Aarya Transport Company. Petitioner's firm had provided access to all records during the course of search. The summons was served upon one of the partners under Section 17 which mentioned the time 10.35 pm. The explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... framed so far nor any demand has been raised in absence of any assessment, the quantum of demand cannot be determined hence, the action of coercive recovery to the tune of Rs. 37,68,300/- by reversing the ITC in electronic credit ledger is bad in law. The prayers sought for are as follows:- "(A) Your Lordships may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other writ, to quash and set aside Form DRC-03 dated 12.2.2022 (at Annexure E) and further be pleased to restrain the respondent No.1 or any other competent officer to generate Form DRC-05 in respect of the concerned Form DRC-03 dated 12.2.2022 (at Annexure E); (B) Your Lordships may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other writ, orders, or directions retraining the respondent-authorities from adopting any coercive measures without issuing any show cause notice as required under the Act to compel the petitioner to pay further tax dues which are disputed by the petitioner-frim and further be pleased to direct the respondent-authorities to refund the amount of Rs.37,68,300/- recovered by reversing the Input Tax Credit on 12.2.2022 through DRC-03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CGST Rules, 2017 is pressed into service where any person makes any payment of tax, interest, penalty, whether on his own ascertainment or as communicated by the proper officer under sub-rule (1A), he shall inform the proper officer of such payment in FORM GST DRC 03 and the proper officer shall issue an acknowledgment, accepting the payment made by the said person in Form GST DRC 04. 10. It is denied that any pressure was put on the petitioner to pay any kind of deposit. The statement of one of the partners on 11/12.2.2022 had been recorded and he had signed on each page and thus, it cannot be said that he was threatened or force. 11. The right of Show Cause Notice is envisaged under Section 73 and 74 of the CGST Act have been contemplated the manner in which the payment of lessor interest or can resultant into the penalty is also reflected. To urge eventually that petition being bereft of any merits deserves no entertainment. 12. In affidavit-in-rejoinder it is urged that the respondent is lying that the petitioner was not coerced to pay the tax. There was no question of reversing the ITC out of his own volition. The petitioner had asked the Chartered Accountant to rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truction 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. Instances have been noticed where some of the taxpayers after voluntarily depositing GST liability through DRC- 03 have alleged use of force and coercion by the officers for making 'recovery' during the course of search or inspection or investigation. Some of the taxpayers have also approached Hon'ble High Courts in this regard. 2. The matter has been examined. Board has felt the necessity to clarify the legal position of voluntary payment of taxes for ensuring correct application of law and to protect the interest of the taxpayers. It is observed that under CGST Act, 2017 a taxpayer has an option to deposit the tax voluntarily by way of submitting DRC-03 on GST portal. Such voluntary payments are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation, 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/0174/2021, whereby the following wholesome directions were issued- "The Central Board of Indirect Taxes and Customs as well as the Chief Commissioner of Central/State Tax of the State of Gujarat are hereby directed to issue the following guidelines by way of suitable circular/instructions: (1) No recovery in any mode by cheque, cash, e-payment or adjustment of input tax credit should be made at the time of search/inspection proceedings under Section 67 of the Central/Gujarat Goods and Services Tax Act, 2017 under any circumstances. (2) Even if the assessee comes forward to make voluntary payment by filing Form DRC-03, the assessee should be asked/ advised to file such Form DRC-03 on the next day after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search has ended and the concerned officers have left the premises of the assessee. 39.1 Clearly, the aforementioned direction, issued by the Gujarat High Court as far back as on 16.02.2021, is binding on the official respondents/revenue, which was not followed in the instant case. 39.2 The violation of the safeguards put in 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. 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-ascertainment. 41.1 Undoubtedly, in this case, no such elbowroom was made available. Conclusion: 42. Therefore, as alluded to hereinabove, we are persuaded to hold, that the aforementioned amounts wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e this Court." 20. It appears that the officer concerned was to remain present before the Court. There is no reference of his remaining present. However it has been conveyed to that Court that the officer had remained present. Be that it may today the officer is also present. The fact remains that there is categorical directions issued by this Court in group of writ applications being Special Civil Application No.3196 of 2021 and allied matters. That, order itself was the reason for publishing the instructions which received the attention of Delhi High Court which also frowned upon the action of the authority by questioning its non-fulfillment of one of the directions, (direction No.2) contained in Bhumi Associates. as the instructions had permitted making of voluntarily payments of filing DRC 03 on the basis of ascertainment of their liability on non payment/short payment of taxes before or at any stage of proceedings. The only safeguard is of the tax officers to inform the tax payers regarding the provisions of voluntary tax payments through DRC-03. These instructions surely are not keeping in pace with the directions issued in toto. They being binding in nature even though iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mar Yadav : One minute. You will get another....... another one. Send it on Whatsapp, Ok. Axay Thakkar : Yes.....Yes Sir. Harindra Kumar Yadav : Please remain Login for one or two minute..... One or two minute. Axay Thakkar : Yes Sir. Harindra Kumar Yadav : Ok.... They will do it. Second Call Conversation. Axay Thakkar : Yes Sir. Harindra Kumar Yadav : Yes. It might have come. Tell me. Axay Thakkar : Yes... 7C873C. Harindra Kumar Yadav : 7C. Axay Thakkar : 87. Harindra Kumar Yadav : 73C after 7.....7C. Axay Thakkar : No....No. 7C873C. Harindra Kumar Yadav : 7C873C. Axay Thakkar : Yes Sir. Harindra Kumar Yadav : It is done. 7C87C. Hold on for one minute. Axay Thakkar : Yes Sir. Harindra Kumar Yadav : It is done. Now I should hang up the call. Just do it. Only one minute Axayji. Please hold on. Axay Thakkar : Yes Sir. A message is received Intimation of voluntary payment is successful filed........ Harindra Kumar Yadav : Yes. Let's see. The system portal is still buffering. Axay Thakkar : Yes..... Yes. Something track of ARN..... A A......something like track status has been received Sir. Harindra Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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