Case Law Details
Shiva Structures Pvt. Ltd. Vs Union of India (Bombay High Court)
The petitioner company was registered under GST and had been allotted a GSTIN number. Officers of the CGST visited the petitioner’s premises for investigation based on specific intelligence. During the visit, the petitioner was stated to have agreed to a short payment of GST amounting to Rs.4,47,53,244/-. On the same day, the petitioner deposited Rs.3 crore. Thereafter, the petitioner was directed to furnish records and attend proceedings before the CGST authorities. Statements of the petitioner’s officer were recorded, including one dated 13-04-2022, wherein it was alleged that the liability had been voluntarily accepted and that Rs.3 crore had been paid through challan on 18-02-2022.
Subsequently, by letter dated 05-05-2022, the CGST authorities demanded payment of the remaining Rs.1,47,53,244/- along with interest. Aggrieved by these actions, the petitioner filed a writ petition seeking declaration of entitlement to input tax credit and alternatively seeking refund of Rs.3 crore paid under protest, along with a direction to issue an appropriate show cause notice.
During the hearing, the petitioner stated that it was not pressing the other reliefs and restricted its claim to refund of Rs.3 crore. The respondent CGST authorities informed the Court that a show cause notice dated 24-11-2023 had already been issued under Section 74 of the Central Goods and Services Tax Act, 2017, demanding GST of Rs.4,47,53,244/-, and that adjudication proceedings were ongoing.
The Bombay High Court observed that the amount was either deposited or made to be deposited before adjudication of tax liability. The Court held that such payment could not be treated as voluntary, particularly because the payment was made on the same day the revenue officials visited the petitioner’s premises. The Court referred to its earlier decision in M/s Cleartrip Pvt. Ltd. Vs. Union of India.
Accordingly, the writ petition was partly allowed. The Court directed the CGST authorities to refund Rs.3 crore to the petitioner forthwith. It further directed that if the refund was not made within two weeks, the amount would carry simple interest at the rate of 6% per annum.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
Petitioner company has been duly registered with and allotted a GSTIN number.
2. Officers of the CGST visited the petitioner’s premises to carry out investigation / enquiry on the basis of specific intelligence. The petitioner is stated to have agreed for short payment of the GST to the tune of Rs. 4,47,53,244/-. The very day it paid Rs.3,00,00,000/-. Subsequently, it was called upon to furnish the record by respondent – CGST office on the next day, along with the record. It submitted the record on 07-03-2022. Another summons was issued to it and accordingly, he attended the CGST office of the respondent on 04-042022. Statement of its officer was recorded on 13-04-2022, alleging that it had voluntarily accepted the liability and having paid Rs.3,00,00,000/- by challan on 18-02-2022. By letter dated 05-052022, the CGST called upon him to pay the remaining amount of Rs.1,47,53,244/- together with interest and by referring to the statement recorded on 13-04-2022.
3. Aggrieved by such action, writ petition has been preferred seeking a declaration that the petitioner is entitled to ITC and in the alternative for refund of Rs.3 Crore, which were paid under protest and further directing the respondent to issue appropriate show cause notice.
4. Learned advocate for the petitioner, on instructions, submits that it is not intending to pursue the rest of the prayers and would be satisfied if its claim for refund of Rs. 3 Crore, is granted.
5. Learned advocate for the respondent – CGST, on written instructions, would submit that appropriate enquiry is being undertaken by issuing show cause notice on 24-11-2023, raising a specific demand of GST of Rs.4,47,53,244/- under section 74 of the Central Goods and Services Tax Act, 2017 and the adjudication process is under way.
6. In the light of above, when it is apparently a matter wherein the petitioner either was made to deposit or had deposited the money even before adjudication of its liability to pay the tax, such payment cannot be treated as a voluntary one; more so, when it was made on the very date when the petitioner’s premises was visited by the revenue officials.
7. Suffice for the purpose to refer to the decision of this Court in the matter of M/s. Cleartrip Pvt. Ltd. Vs. The Union of India; (2016) 42 STR 948.
8. The writ petition is allowed partly.
9. The respondent – CGST shall forthwith refund the amount of Rs.3,00,00,000/- to the petitioner.
10. If the amount is not refunded within two weeks, it shall carry simple interest @ 6% per annum.
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