Non-voluntary payment made under compelling circumstances during search is liable to be refunded

Neeraj Paper Marketing Ltd Vs Special Commissioner (Delhi High Court)

Delhi High Court held that payments made under compelling circumstances during the course of search, without ascertaining tax liability and issuance of notice post search, is liable to be refunded back to the taxpayer along with interest.

Facts-

The petitioner carries on a business in trading of waste paper and craft paper, which are taxable at 5% and 12% respectively, under the provisions of GST laws. On 29.07.2022, a search was conducted at the petitioner’s business premises u/s. 67(2) of the CGST Act, on the basis of GST INS-01, issued by respondent no.1.

During the course of the search operation, documents pertaining to the financial period FY 2017-2018 to 2020-2021 were inspected. Consequently, it was revealed that there was a mismatch of Rs. 60 lakhs in GSTR-2A and GSTR-3B during the year 2018-2019, and ₹20 lakhs in the year 2019-2020.

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