High Court of Punjab and HaryanaCWP/23788/2021allowed

Diwakar Enterprises Pvt Ltd v. Commissioner Of Cgst And Another

2023-03-14Ms. Justice Ritu Bahri,Mrs. Justice Manisha Batra8 pages

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GAURAV ARORA 2023.04.03 10:40 I attest to the accuracy and authenticity of this order/document P&H HC, Chandigarh

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"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 petitionerCompany, 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.

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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 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 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 the end of search proceedings and after the officers of the visiting team have left the premises of the assessee.

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(3) Facility of filing [a] complaint/grievance after the end of search proceedings should be made available to the assessee if the assessee was forced to make payment in any mode during the pendency of the search proceedings.

(4) If complaint/grievance is filed by assessee and officer is found to have acted in defiance of the afore-stated directions, then strict disciplinary action should be initiated against the concerned officer."

78. It is important to note, that while in line with the directions contained in Bhumi Associate, the aforementioned Instruction i.e., Instruction No. 01/20222023 dated 25.05.2022 inter alia, provides, as noticed above, that no recovery of tax should be made during search, inspection or Investigation unless it is voluntary-it does not elaborate on various modes for collection adopted In such circumstances, for example via cheque, cash, e-payment or even via adjustment of Input tax credit.

79. Furthermore, the Instruction falls short, inasmuch as it sidesteps direction number two (2) contained in Bhumi Associate, which states that even if the assessee comes forward to make voluntary payment In the prescribed form l.e., GST DRC-03, he/she should be advised to file the same the day after the search has ended and the concerned officers have left the premises of the assessee. (

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"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 16.12.2020 before jurisdictional GST authority. The Company requested the department to refund the amount. When the attempts of the company to seek refund did not yield any result, the writ petition was filed on 25.02.2021. Section 54 of the CGST Act provides for a time limit of two years to claim refund. The company not only filed the claim for refund within two years but the writ petition as well.

No rights have accrued to the department, as the claim for refund made by the company is well within time. Therefore in the light of legal principles referred to in the preceding paragraph, it can not be said that there was any delay or laches in filing writ petition. Therefore the fourth issue is answered by stating that there is no delay or laches in filing the writ petition.

31. The submission by the company that Green Finch is neither a non existent entity nor that the company has rightly availed input tax credit is concerned need not be adverted to in this proceeding, as the same is pending investigation. Article 265 of the Constitution mandates that collection of tax has to be by the authority of law. If tax is collected without any authority of law, the same would amount to depriving a person of his property without any authority of law and would infringe his right under Article 300A of the Constitution of India as well. In the instant case, the only provision which permits deposit of an amount during pendency of an investigation is section 74(5) of CGST Act, which is not attracted in the fact situation of the case.

Therefore, it is evident that amount has been collected from Company in violation of Article 265 and 300-A of the Constitution. Therefore, the contention of the Department that amount under deposit be made subject to the outcome of the pending investigation can not be accepted. The Department, therefore, is liable to refund the amount to the Company.

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@A 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 471. whether on his own ascertainment or, as communicated by the proper officer under sub- Tule (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.

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(RITU BAHRI) JUDGE

(MANISHA BATRA) G Arora JUDGE *+" ,G7* ,G7*