Bhumi Associate Vs Union of India Through the Secretary (Gujarat High Court)
Summary: Gujarat High Court, by an interim order in Bhumi Associate Vs Union of India Through the Secretary, proposed safeguards against recovery of GST during search and inspection proceedings under Section 67 of the Central/Gujarat Goods and Services Tax Act, 2017. The Court directed the Central Board of Indirect Taxes and Customs and the Chief Commissioner of Central/State Tax, Gujarat, to issue suitable circular/instructions providing that no recovery should be made during search or inspection proceedings by cheque, cash, e-payment or adjustment of input tax credit under any circumstances. Even where an assessee comes forward to make a voluntary payment through Form DRC-03, the Court directed that the assessee should be asked or advised to file the form on the next day after conclusion of the search and after the visiting officers have left the premises.
The proposed safeguards also required a facility for taxpayers to lodge complaints or grievances after completion of search proceedings where payment was allegedly obtained under compulsion. If, upon such complaint, an officer was found to have acted contrary to these directions, strict disciplinary action was contemplated against the concerned officer. The Court recorded that departmental officers who had been directed to participate in the video conference had joined at a late stage and had therefore missed the discussion between the Court and the Additional Solicitor General. The Additional Solicitor General was permitted to respond to the proposed directions, and the officers were directed to join the subsequent hearing in time. The matters were posted for further hearing on 18.02.2021.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. We have heard all the learned counsel appearing for the writ applicants. We have also heard Mr. Devang Vyas, the learned Additional Solicitor General of India appearing for the respondents.
2. The officers of the concerned department who were asked to join the video conference did join, but at a very later stage. They were unable to witness the discussion that took place between the Court and Mr. Vyas. We propose to pass an interim order issuing the following directions.
“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, epayment or adjustment of input tax credit should be made at the time of search/inspection proceedings under Section 67 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 DRC03, the assessee should be asked/ advised to file such Form DRC03 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.
(3) Facility of filing 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 aforestated directions, then strict disciplinary action should be initiated against the concerned officer.”
3. Mr. Devang Vyas, the learned Additional Solicitor General of India has taken the pains to address this Court from the hospital room. Mr. Vyas is not well and has been hospitalized. Mr. Vyas may respond day after tomorrow to the aforesaid directions, which we propose to issue. We direct all officers to once again join the video conference dayafter tomorrow, but this time, they should join well in time.
Post all the matters on 18/02/2021 on top of the board.
