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TMI Blog2023 (8) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... the sake of convenience, the facts are being extracted from CWP-10923-2021. 2. As pleaded, the petitioner-M/s Parsvnath Traders, a firm under the proprietorship of Krishan Jain, is engaged in the business of trading of different types of chemicals. During the years 2018-19 and 2019-20, it had made purchases in the normal course of business from its regular supplier- M/s Royal Sales Corporation, Rohtak (for short-"M/s Royal"). The goods purchased by the petitioner from M/S Royal were received along with requisite invoices, E Way Bills, Goods receipts and other supporting documents. The petitioner paid GST on the purchases so made, and had subsequently, availed Input Tax Credit (for short-"ITC") for sums of Rs. 60.89 lacs and Rs. 1.25 crore respectively. On 05.02.2021, the officials of the Department of Central Goods and Services Taxation (for short-"CGST") had searched the business premises of the petitioner and verbally informed it during investigation that there were allegations that the petitioner had got issued bogus invoices from M/S Royal without receiving goods in fact and had availed ITC in an illegal manner. The petitioner was forced to deposit a sum of Rs. 20 lacs on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the proprietor who was not present there, his son deposited a sum of Rs.16 lacs by submitting Form GST DRC-03 as a token of acceptance regarding fake purchases and also recorded statement that some purchases made by the firm from Delhi might be fake. As the record also revealed that M/S Royal had issued invoices regarding sale of goods to the petitioner as well, therefore, premises of the petitioner were searched on 05.02.2021 after seeking authorization. The petitioner deposited GST amounting to Rs. 20 lacs vide DRC-03 dated 05.02.2021 and had again deposited a sum of Rs. 30,70,216/- on 16.02.2021 through DRC-03. The respondents submitted that the payments made by the petitioner were voluntary payments and amounted to admission by the petitioner that it had received fake invoices from M/S Royal and by misutilising those invoices had availed ITC on the strength thereof. It was denied that the petitioner was forced to deposit the amount of Rs. 50.70 lacs. 4. It was further submitted that enquiries regarding movement of outward supply of goods by M/S Royal to the petitioner had also been made and information was procured from the office of Regional Transport Authority, Rohtak abou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner and was voluntarily made vide GST DRC-03, therefore, there was neither any requirement of issuing show cause notice under Section 74(1) of the Act nor the petitioner was entitled to any refund of the amounts so paid. Hence, it was submitted that the petition was liable to be dismissed. 8. We have heard learned counsel for the parties at considerable length and have minutely scrutinised the record. 9. Before considering the contentions raised by both the parties, it would be proper to discuss certain provisions of law which are relevant for the purpose. Section 2 (59) of the Act defines "Input" as any goods other capital goods used or intended to be used by a supplier in the course or furtherance of business. Sub-Section (62) defines "Input Tax" in relation to a registered person as Central tax, State tax, Integrated tax or Union Territory tax charged on any supply of goods or services or both made to him. As per sub-Section (63), "Input Tax Credit" means the credit of input tax. Further, as per Section 16 of the Act, a registered dealer may avail ITC of inputs which are used in the furtherance of business and in following conditions :- I The registered persons should be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on it would be relevant to understand the scheme of assessment as set out under Section 74 of the Act. A bare reading of provisions of Section 74(1) of the Act makes it clear that it provides for determination of tax not paid, shortly paid or erroneously refunded or wrongful availment of ITC by reason of fraud, willful misstatement or suppression of facts etc. The sub-Section 5 of Section 74 on the other hand, provides an opportunity to an assessee for amicable settlement of an assessment before the authorities prior to receipt of show cause notice and the assessee may pay at that stage the tax along with interest and penalty on the basis of 'self ascertainment' or on ascertainment by the proper officer. It is, however, well settled proposition of law that Section 74(5) of the Act cannot be considered as a statutory sanction for advance tax payment, pending final determination in the assessment because that would certainly be contrary to scheme of assessment as set out under Section 74. Sub-Section 6 of this Section further provides that no show cause notice shall be served upon the assessee on deposit by way of such ascertainment. These provisions clearly provide an opportunity fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rally under the stress of search/investigation does not amount to lead to 'self assessment' or 'self ascertainment'. The 'self ascertainment' which is contemplated under Section 74(5) of the Act, 2017 is in the nature of ' self assessment' and amounts to a determination by it which is unconditional and not as in the present case when shortly after depositing the amount Rs. 50.70 lacs, the petitioner approached the revenue for refund of the same. Such recovery is not permissible. In this regard, reliance can be placed upon in M/s Bhumi Associate's case (supra) wherein, it was observed that at the time of search/inspection proceedings under the provisions of Central/Gujarat Goods and Services Tax Act, 2017, no recovery in any mode by cheque, cash, e-payments or adjustment of ITC should be made. 13. Further, no crystalised liability was shown to be existing against the petitioner and no show cause notice had been issued to it either at that time or even till now and the amount of Rs. 50.70 lacs was recovered from it during investigation and has been retained by it. In similar circumstances in Century Knitters (India) Ltd.'s case (supra), a Bench of this Court had observed that unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be retained by the Department if proceedings under Section 74(1) of the Act are not initiated. 16. In the present case, the petitioner shortly after depositing the amount of Rs. 50.70 lacs had approached the revenue for refund of the same therefore, the ascertainment contemplated under Section 74(5) of the Act which amounts to an unconditional determination and in the nature of 'self assessment' by the assessee is not attracted and hence, the said deposit could not be stated to be voluntary deposit by any stretch of imagination, irrespective of the fact that deposits were made in the form of GST DRC-03. In view of the discussion as made above, we are of the opinion that the petitioner deserves the relief as claimed by it and accordingly, mandamus as sought by the petitioner, is granted and it is ordered that the sum of Rs. 50.70 lacs, which was collected from the petitioner-M/S Parsvnath Traders during the course of search, shall be refunded to it within a period of 6 weeks from today. The petitioner shall also be entitled to interest @ 6% per annum from the date of deposit till the refund amount is released in its favour. 17. With regard to the petitioner- M/S Mahavira D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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