Case Law Details
Dhariwal Products Vs Union of India (Rajasthan High Court)
By way of the instant writ petition, the petitioner seeks to assail the action of the respondent GST Department and its officials in conducting search and seizure of the petitioner’s premises, coercing the petitioner to deposit a huge sum of Rs.11.5 crores during the course of search operations held on 05.06.01.2022 as being in gross contravention of the mandatory requirement of Section 74 of the CGST Act.
Mr. Vikas Balia, learned Senior Advocate assisted by Mr. Sharad Kothari, Mr. Mayank Taparia and Mr. Priyansh Arora, urges that the procedure adopted by the respondent officials while undertaking search operations in the petitioner’s premises without prior intimation is totally illegal, unjust and highhanded. The GST Intelligence Officer, though present at the residence of the petitioner, gave a sham notice to the petitioner’s representative for appearance in the factory premises and thereafter forcibly extracted a confession from him. The petitioner was forced to deposit a sum of Rs.11.5 crores towards alleged GST evasion even though there is no evidence of such short payment/evasion. He urges that no sooner the petitioner’s representative got the opportunity, he made a retraction of the statement. As the statement has been retracted, the respondents are required to adopt the mandatory procedure provided under Section 74 of the CGST Act, but rather than adhering to the said procedure, repeated notices are being issued to the petitioner’s representative under Section 70 of the CGST Act and he apprehends arrest on appearance before the respondent officers, if their illegal demand of payment of GST is not acceded to. He urges that even the amount which has already been deposited is not a voluntary deposit as the petitioner seriously disputes the liability and thus, the procedure under Section 74 of the CGST Act would come into fray. Once this procedure is adopted, the respondents would be required to refund the amount already extracted from the petitioner and that is why the GST authorities are bypassing the lawful procedure and are trying to extract more money from the petitioner under the facade of it being a voluntary deposit. Mr. Balia further submits that the liability of the petitioner towards non-payment/evasion of GST has not been determined and without doing so, the respondents are pressurizing the petitioner to voluntarily deposit the amount or to face the consequence of arrest. He, thus, urges that the impugned notices are grossly illegal and amount to an abuse of power by the GST officials. In support of his contention, Mr. Balia has placed reliance on the following judgments :-
(1) M/s. Bhumi Associate Vs. Union of India through the Secretary [2021 (2) TMI 701] – Gujarat High Court
(2) Deem Distributors Private Ltd. Vs. Union of India [(2021) 87 GST 523] – Telangana High Court
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