9911796707
TMI Blog2025 (2) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... ment was made on 03.08.2021 while the proprietor of the respondent was in Bengaluru. So it suggests, the statements were recorded and deposits were made under threat and coercion. The statements and the payments made cannot be separated nor it can be concluded that there is no allegation of threat and coercion for the purpose of payment/deposit of the amounts. Section 74 (1) of the CGST Act contemplates that the assessee has an opportunity under Section 74 (5) to make his own ascertainment of tax and deposit the same. The appellants' case is that the respondent has deposited the amount upon self-ascertainment of tax, which stand is contested by the respondent by stating that the deposit was under threat and coercion, otherwise no amount is payable. So, the issue is whether any tax is payable at all? So, pending decision on the issue, can the amount remain deposited with the appellants? The answer has to be "NO", more so when it is concluded by the learned Single Judge that the same was not voluntary, with which it is agreed upon. Insofar as the affidavit dated 10.08.2021 is concerned, the plea is that, such an affidavit was not given to the Authorities and it is for the first tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght of pending adjudication, initiated by issuance of show-cause notice. 3. The appellants had initiated proceedings during investigation of M/s Raj Chemicals, wherein the statement of one Vijay Kumar Gupta (one of the partners of M/s Raj Chemicals) was recorded under Section 70 of the CGST Act. The statement of Vijay Kumar Gupta had referred to supplies made by M/s Raj Chemicals to entities including the respondent herein, whereby invoices were raised without actual supply of any goods from M/s Raj Chemicals. 4. The case of the appellants is that, on an analysis of the e-way bills, it is revealed that the vehicles have not moved as evidenced by the RFID/fastag data. 5. A show-cause notice came to be issued on 30.11.2022 to the respondent. The case of the respondent before the learned Single Judge was, during the course of investigation and prior to issuance of show-cause notice, a forcible recovery was made which is being sought to pass off, as voluntary payments as per the procedure prescribed. The payments made by the respondent were to the extent of Rs. 1,00,00,000/- on 31.07.2021 and Rs. 1,50,00,000/- on 03.08.2021. 6. The case of the respondent in the writ petition as dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e drivers of the Respondents. The Panchnama wrongly mentions the time as 11 30 pm 30-07-21. A-11-Part of SCN 9 31.07.2021 12:30 a.m. Summons issued to attend Bengaluru on 2nd August 21. The Petitioner requested that last 3 days have taken a toll on his health and he is exhausted, and he requested that he be allowed to attend after a few days. Which initially the officers agreed but constantly called the Petitioner on 2nd August 21 and directed him to come on 3rd August 21. B-Page 65 10 31.07.2021 12:30 p.m. As soon as possible, despite going through 2 days of mental and physical trauma, under the constant calls from the officer under their directions 1 crore paid through RTGS at the Bank. All through the Investigation the petitioner had no access to any legal consultation. Page 63 11 03.08.2021 Petitioner attends the summons and was kept on waiting till late afternoon. Whilst all phones and contact details of the Petitioner was unavailable him him (sic) since 30-07-21 due to seizure by the Authorities, these officers directly spoke to the Debtors of the Petitioner, the Respondent made them deposit the payment in the Petitioner's account. Subsequently after confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issued does not exclude payments of Rs. 2,50,00,000/- which also strengthens the case of the respondent that the amount paid was not towards self-ascertainment. 8. The case of the appellants before the learned Single Judge was that, an information of evasion of tax was gathered by the Officers of DGGI while conducting investigation in respect of M/s Raj Chemicals. The statement of Vijay Kumar Gupta was recorded which would indicate the role of the respondent in tax evasion constituting receipt of invoices without actual supply of goods. It was specifically asserted that, the payments made by the respondent during investigation through Form GST DRC-03 dated 03.08.2021 as well as payment made under identical circumstances on 31.07.2021 were voluntary and it is to be construed to be a part of self-ascertainment under Section 74 (5) of the CGST Act. 9. It was stated that, the amounts were generated by the respondent from outside the Office of DGGI, Bengaluru. Even the retraction of the statements vide affidavit dated 10.08.2021 was belated. A stand was taken by the appellants that, the payment made under Section 74 (5) read with Rule 142 (2) of the GST Rules would be dealt with or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (1) in respect of such amount which falls short of the amount actually payable. (emphasis supplied) 23. In terms of Section 74 (8), once the person chargeable with tax pays tax, interest and penalty "... all proceedings in respect of the said notice shall be deemed to be concluded." 24. It must be noted that the payments made by the petitioner of Rs.1.00 crore on 31.07.2021 and further amount of Rs.1.50 crores on 03.08.2021 and even if 'DRC-03 declaration' is taken note of, it cannot be stated that in the present case, there is self-ascertainment. For the purpose of self-ascertainment, it is clear that it amounts to a voluntary determination by the assessee himself as regards the liability of tax. In light of the stand taken in the Affidavit dated 10.08.2021 and the averments made in the writ petition filed on 16.09.2021, this element of voluntariness is absent and accordingly, the sine qua non of self-ascertainment is not fulfilled. Though the declaration in Form DRC-03 contains a declaration that the filing is voluntary, the facts as noticed above are sufficient to construe that such declaration was in fact not voluntary. 25. It is also to be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, the statement of Vijay Kumar Gupta was recorded wherein he has confirmed that they have not received any goods from the entities, but only GST invoices without actual receipt of goods. He also received commission of 0.5% of the taxable value for issuing invoices without supply of goods. The e-way bills were issued on the basis of vehicle details provided by the brokers and since the goods have not actually been supplied, the vehicles would not have been moved. So, the supplies purported to have been made by M/s Raj Chemicals to the entities located outside Delhi and Haryana from April 2020 to June 2021 are bogus and invoices have been raised without actual supply of goods, which includes M/s Kesar Colour Chem Industries (the respondent) as one of the entities which has received invoices without actual supply of goods. Though the place of business of the aforesaid industry is in Mumbai, it was found that the premises is an empty land. The search was conducted on additional place of business from 10:30 a.m. on 29.07.2021 to 23:30 p.m. on 30.07.2021. 15. According to Sri. Kamath, the proprietor of the industries has agreed that there was irregular availment of input tax credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gave a reply dated 24.11.2022 denying the entire liabiliby including the voluntary payment made by him and hence, a show-cause notice was issued for the entire liability by proposing to appropriate the amount which was already paid voluntarily by the respondent. 21. Sri. Kamath has drawn our attention to the affidavit filed along with the writ petition by the respondent to state that, the plea of coercion of the respondent was primarily related to the statement recorded by the appellants' Officers and not in respect of the payment made voluntarily by the respondent. In other words, to say that statements were taken under coercion is different from the fact that the respondent was coerced to deposit the amount of Rs. 2,50,00,000/-. Since no such stand has been taken that the payments have been made under coercion, the learned Single Judge could not have directed for the refund of the amount. Hence he stated, the direction of the learned Single Judge is liable to be set aside and the appellants be allowed to continue with the proceedings on the show-cause notice and to pass a final order. If any liability is fastened upon the respondent the payment already made shall be adjusted, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to obtain confirmation letter dated 14.12.2021 from M/s Raj Chemicals which prove that the entire transactions of sale and purchase are genuine. 24. She highlights the fact that the appellants visited the respondent on 29.07.2021 in the morning. Subsequently, the investigation continued for 48 hours wherein the respondent was detained illegally in the Office by the Investigation Department for almost two days without any rest or respite. The investigation was not completed at 11:30 p.m. on 30.07.2021 as in fact the appellants had left at 12:30 a.m. on 31.07.2021 after forcibly taking an undertaking from the proprietor to arrange funds and make the payment of Rs. 1,00,00,000/- next day morning, else the proprietor would be arrested. The payment was made within 12 hours. The investigation had exceeded 36 hours and it was at that time, that the appellants had in fact issued summons to the respondent to appear on 02.08.2021 in Bengaluru with the threat that if an amount of Rs. 1,00,00,000/- is not paid immediately upon the bank opening on the very same date i.e., 31.07.2021, the appellants shall arrest the respondent. Hence, it is an admitted fact that the payment was made fully under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly lays down how the investigation is to be conducted and no deposit of tax can be made voluntarily, she has relied upon the judgment of the Delhi High Court in the case of Lovelesh Singhal -Vs.- Commissioner, Delhi Goods and Services Tax and others [(2024) 121 GSTR 422 (Delhi)]. She states, in the given facts, the present appeal filed by the appellants is liable to be rejected. Analysis: 27. Having heard the learned counsel for the parties and perused the record, the learned Single Judge has allowed the writ petition on a finding that the deposit of the amount of Rs. 1,00,00,000/- on 31.07.2021 and Rs. 1,50,00,000/- on 03.08.2021 cannot be treated as a self-ascertainment as the element of voluntariness is absent. According to the learned Single Judge, the sine qua non of self-ascertainment is not fulfilled and as such, the payment is under coercion, the same is liable to be refunded back to the respondent. 28. The issue is whether such a conclusion of the learned Single Judge is justified? 29. The submission of Sri. Kamath was as there is no allegation that the deposit of the two amounts was under coercion and duress, the finding of the learned Single Judge is not sustainabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion with an intention to resile out of the statements made to the appellants cannot be relied upon, is unsustainable. This we say so because, the only stand of the appellants in the appeal/affidavit is, the same is belated. If that be so it is noted, the affidavit is dated 10.08.2024 i.e., one week after the statement dated 03.08.2024 was made. One week is not a large period to be considered as fatal/belated. Learned counsel for the respondent is justified in relying upon the judgment of the Delhi High Court in the case of Lovelesh Singhal (supra), wherein the Delhi High Court has, in paragraphs No.21 to 24, 28 to 32, 35 and 36, held as under: "21. The next question to be examined is whether the petitioner is entitled to reversal of the ITC that was debited from his ECL. As noted above, according to the petitioner, he was coerced to make the deposit of tax by debiting the ECL at 2 : 06 a.m. on October 8, 2022. 22. According to the respondents, the concerned officers of the Department had reached the principal place of business as well as other additional places of business at about 4 p.m. on October 7, 2022. The respondents state that the petitioner provided access to its addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such payments were made voluntarily. Clearly, where a taxpayer turns around and states that the payments had not been made involuntarily and the circumstances prima facie indicate so, the taxpayer must be granted the benefit of withdrawing such payments. Obviously, in such cases, the taxpayer would forfeit immunity from levy of any penalty and the concerned authorities are not precluded from proceeding against the taxpayer in respect of any default and to the full extent as permissible under law. 30. It is relevant to note that the payment of tax on a self-ascertainment basis would necessarily require acceptance of the grounds on which such payments had been made. In the present case, it would be necessary for the petitioner to acknowledge the underlying liability on account of which the tax is paid. This is also required to be acknowledged by the respondents. 31. However, in the present case the petitioner has disputed that he is liable to pay any tax. There is no determination of the petitioner's liability to pay tax. Clearly, in such circumstances, the tax deposited by the petitioner cannot be considered as voluntary and within the scheme of section 73 (5) of the CGST Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon case were in the midnight and it is on that basis, the Court has come to the conclusion that the deposits made were under coercion and duress. The said submission is not appealing. The Court need to look into the facts in totality to come to a conclusion whether there was threat and coercion resulting in the statements recorded and also the deposits made. On a cumulative reading of the facts of this case, we are of the view that the learned Single Judge is right in coming to a conclusion in paragraphs No.24 and 28 of the impugned order which we have reproduced above that the payments were recovery and were contrary to law. 32. Insofar as the submission of Sri. Kamath as the writ petition involved disputed question of facts, the same could not have been gone into in proceedings under Article 226 of the Constitution of India is concerned, there is no dispute on the proposition advanced by Sri. Kamath, but the said proposition may not be applicable in the case in hand in view of the undisputed facts noted by the learned Single Judge that payments made were during investigation both at Mumbai and Bengaluru. 33. In the facts of the case we are of the view that, writ appeal is d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
