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TMI Blog2024 (3) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... be liable to be paid on the amount deposited by way of an adjustment of the credit amount standing in the Electronic Credit Ledger, unless an appropriate application had already been made, prior to the alleged non-voluntary deposit, claiming refund or as an adjustment towards tax due - Respondents are directed to, within four weeks, refund the amount of Rs. 15,06,342/- to the Petitioner alongwith statutory interest @ 6% p.a. from date of deposit till repayment and the amount of Rs. 25,00,000/- by forthwith re-crediting the same to the Electronic Credit Ledger of the Petitioner. Petition disposed off. - HON BLE MR. JUSTICE SANJEEV SACHDEVA AND HON'BLE MR. JUSTICE RAVINDER DUDEJA Advocates who appeared in this case: For the Petitioner Mr. A. Kumar, Mr. Pravesh B., Advocates. For the Respondents: Mr. Rajeev Aggarwal, ASC. JUDGMENT SANJEEV SACHDEVA, J. (ORAL) 1. Petitioner seeks refund of the integrated GST amounting to Rs. 40,06,342/- (Rs. 15,06,342/- towards stock variation and 25,00,000/- towards alleged wrongful input tax credit) recovered from the petitioner without authority of law. 2. Petitioner was engaged in business of manufacturing and trading of ferrous and non-ferro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Per contra learned counsel for respondents submits that there was no coercion, and the amount was voluntarily deposited by the petitioner. He further submits that recovery proceedings under Section 73 of the Central Goods and Services Tax Act 2017 have been initiated by issuance of a Show Cause Notice and proceedings are underway. 12. It would be apposite herein to quote the decision in the case of Vallabh Textiles vs. Senior Intelligence Officer (supra). A Co-ordinate bench of this court held as under: 51. 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. 52. Thus, if the person chargeable with tax takes recourse to such a route, the proper officer is restrained from serving any notice qua tax or penalty under the provisions of the 2017 Act or the 2017 Rules framed thereunder, unless the amount which is self-ascertained by the person chargeable with tax falls short of the amount payable as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficial respondents/revenue that a notice was served. 63. 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 subsection (1) of Section 74 of the 2017 Act. 64. 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. 65. 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 subsection (5) of Section 73 [which relates to cases not involving fraud, wilful misstatement or suppression of facts to evade tax] or as the case may be, the payment of tax, interest and penalty under sub-section (5) of Section 74 [which relates to cases involving fraud, wilful misstatement or suppression of fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 arise any situation where recovery of the tax dues has to be made by the tax officer from the taxpayer during the course of search, inspection or investigation, on account of any issue detected during such proceedings. However, the law does not bar the taxpayer from voluntarily making payment of any tax liability ascertained by him or the tax officer in respect of such issues, either during the course of such proceedings or subsequently. 4. Therefore, it is clarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted in defiance of the afore-stated directions, then strict disciplinary action should be initiated against the concerned officer. ***** ***** ***** 80. 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. 81. 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. ***** ***** ***** 83. 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. 13. In in the instant case, the deposit made by the Petitioner was at 3:10 and 3:18 AM during the search operation being carried out which continued till 5:00 AM The fact that Petitioner was made to deposit the amount at 3:10 and 3:18 AM before the search ended and the officers left at 5:00 AM, shows that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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