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TMI Blog2023 (4) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... ATE OF KARNATAKA, COMMISSIONER OF STATE TAX GOODS AND SERVICE TAX BENGALURU [ 2022 (3) TMI 625 - KARNATAKA HIGH COURT] , wherein the question was that whether the amount was voluntarily paid during investigation by a company under Section 74 (5) of Act. The appeal was dismissed and it was held that Article 264 of the Constitution of India mandates that collection of tax has to be by authority of law. If tax is collection without any authority of law, the same would amount to depriving person of his property without any authority of law and would infringe his right under Article 300A of Constitution. The only provision which permits deposit of amount during pendency of investigation is Section 74 (5) of Act, which is not attracted. The amount collected from company is in violation of Article 265 and 300A of Constitution. The contention of the department that amount under deposit be made subject to outcome of pending investigation, cannot be accepted. In the present case, as per the department, the petitioner has deposited the impugned amount voluntarily and the proper procedure has been followed. But Article 265 of the Constitution of India lays down that collection of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner. On 08.02.2023, this Court passed the following order:- Learned counsel for the petitioner submits that as far as the matter involving respondent no.2 is concerned, the same now stands infructuous as no claim survives whereby after blocking his account, they have unblocked his account after a period of one year and consequential steps have already been taken against the demand raised by the respondent and an alternate remedy has been availed. As far as unblocking of the account, the issue has come to an end. Now with regard to respondent no.1, the search was conducted on 14.01.2021 in the office of the petitioner and the Director of the petitioner- Company, as alleged by the petitioner, was taken to the office of respondent No.1. The matter is being adjourned to 14.02.2023, so as to enable the counsel for respondent No.1 to find out after the issuing the summons (Annexure P17), what further steps have been taken till date. On notice of this petition, a by way of affidavit of Sophia Martin Joy, Commissioner, CGST, Faridabad was filed in this Court and in para No. 1, it has been stated that it is wrong to say that Rs.1,99,90,000/- were forcibly go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nandan Sahaya and Abhinav Sahaya under Section 70 of CGST Act 2017 but none has put in appearance. Now the question for consideration in the present writ petition would be that whether respondent No. 1 is liable to refund a sum of Rs.1,99,90,000/- along with interest. Reference at this stage can be made to judgment of Delhi High Court in a case of Vallabh Textiles vs. Senior Intelligence Officer and others, 2022 SCC Online Del 4508 where the sole question which arises for consideration is that whether a 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. The writ petition was disposed of and in para No. 77 to 79, it has been observed as under:- 77. 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, SCA No. 3196 of 2021, order dated 16-2- 2021 (Guj), whereby the following wholesome directions were Issued- The Central Board of Indirect Taxes and Customs as well as the Chie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and it was held that Article 264 of the Constitution of India mandates that collection of tax has to be by authority of law. If tax is collection without any authority of law, the same would amount to depriving person of his property without any authority of law and would infringe his right under Article 300A of Constitution. The only provision which permits deposit of amount during pendency of investigation is Section 74 (5) of Act, which is not attracted. The amount collected from company is in violation of Article 265 and 300A of Constitution. The contention of the department that amount under deposit be made subject to outcome of pending investigation, cannot be accepted. The department was held liable to refund amount to Company. In para No. 30 and 31, it has been observed as under:- 30. In the backdrop of well settled legal principles and the statutory provision we may advert to the facts of case in hand. The Company deposited a sum of Rs.15 Crores at about 4.00 a.m. on 30.11.2019 and a sum of Rs.12,51,44,157/- on 27.12.2019. The company filed an application seeking refund on 29.09.2020. Thereafter the company filed an application seeking refund on 16.12.2020 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by the proper officer and inform the proper officer in writing of such payment. Now reference can be made to Section 142 (2) of CGST Rules, 2017 which lays down:- 142 (1) xxx xxx xxx (2) Where, before the service of notice or statement, the person chargeable with tax makes payment of the tax and interest in accordance with the provisions of sub-section (5) of section 73 or, as the case may be, tax, interest and penalty in accordance with the provisions of sub-section (5) of section 74, or where any person makes payment of tax, interest, penalty or any other amount due in accordance with the provisions of the Act, 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 acknowledgement, accepting the payment made by the said person in FORM GST DRC-04. In the present case, as per the department, the petitioner has deposited the impugned amount voluntarily and the proper procedure has been followed. But Article 265 of the Constitution of India lays down that collection of tax has to be by the authority of law. If ..... X X X X Extracts X X X X X X X X Extracts X X X X
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