2022-TIOL-333-HC-KAR-GST
UoI Vs Bundl Technologies Pvt Ltd
GST - Swiggy case - Intra Court appeal takes an exception to order dated 14.09.2021 = 2021-TIOL-2073-HC-KAR-GST passed by the Single Judge by which the writ petition preferred by the respondent No. 1 has been disposed of with the direction to the appellants to consider the applications for refund submitted by the respondent No. 1 and to pass suitable orders thereon within a period of four weeks.
Held:
+ Issue which arises for consideration is whether amount of Rs.27,51,44,157/- has been paid by the company on its own ascertainment under section 74(5) of the Act. In the instant case, there is no material on record to indicate that the amount of Rs.15 Crores and an amount of Rs.12,51,44,157/- which were paid at about 4AM and 1PM on 30.11.2019 and 27.12.2019 respectively were paid on admission by the Company about its liability.
+ There is no communication in writing from company to the proper officer about either self-ascertainment or admission of liability by company to infer that such a payment was made under Section 74(5) of the Act. The company intimated the Department vide Communication dated 30.11.2019 that it reserves its right to claim refund of the amount and the same should not be treated as admission of its liability.
+ Thus it is evident that payments have not been made admitting the liability. On the other hand, the company reserved its right to seek refund and made it expressly clear that payment of the amount should not be treated as admission of its liability. It is held that the amount was not paid voluntarily under Section 74(5) of the CGST Act. [para 19, 21]
+ Question whether any threat was extended to officers of the company is a question of fact which can't be adjudicated in a summary proceeding under Article 226 of the Constitution of India. Liberty is reserved to the parties to agitate the issue of threat and coercion in an appropriate proceeding. Accordingly, held that amounts were paid by the company involuntarily. [para 25]
+ Company has taken a stand in the writ petition that during the course of investigation, the DGGI officers have acted in a high handed and arbitrary manner and that the officers locked the door and extended threats of arrest to Directors of the Company. It is pertinent to note that company in the writ petition has neither attributed any specific role to officers of DGGI by name nor has impleaded them in the writ petition. Therefore, the same being a question of fact cannot be adjudicated in a summary proceeding under Article 226 of the constitution of India. [para 26]
+ No one in a society governed by rule of law can take resort to a course of action not permissible in law. A Statutory power has to be exercised reasonably and in good faith, and for the purpose for which it is conferred. The power vested in any Authority by law has to be exercised in consonance with the spirit as well as letter of the Act. The broader the sweeper ambit of the power, the more caution and circumspection is required while invoking such power. A statutory power has to be exercised within a system of controls and has to be exercised by relevance and reason. It needs reiteration that a statutory power should not be exercised in a manner, so as to instil fear in the mind of a person. [para 27]
+ 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 - Company filed an application seeking refund on 29.09.2020 - 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, it cannot be said that there was any delay or laches in filing writ petition.
+ The rule which says that this Court in exercise of its power under Article 226 of the Constitution may not enquire into belated and stale claims is not a rule of law but a rule of practice based on sound and proper exercise of discretion. [para 28, 30]
+ 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 cannot be accepted. The Department, therefore, is liable to refund the amount to the Company. [para 31]
+ Conclusion by the Single Judge concurred with & Appeal dismissed.
- Appeal dismissed: KARNATAKA HIGH COURT
2022-TIOL-330-HC-MUM-GST
Originative Trading Pvt Ltd Vs UoI
GST - Petitioner has prayed for a declaration that the circular [ CBEC-20/16/05/2021-GST/359 ] dated 23rd February, 2021 is ultra vires the provisions of the Central Goods and Services Tax Act, 2017 or in the alternative to read down the circular dated 23rd February, 2021 to make the recording of reasons or grounds of attachment mandatory in the attachment order or Form DRC-22 issued in terms of Rule 159(1) of the CGST Rules - Question that arises for the consideration is whether the remedy of the petitioner to lodge his objection to the order of provisional attachment under section 83 read with Rule 159(1) of the CGST Rules can be effectively exercised without communication of the opinion of the Commissioner atleast at that stage or not.
Held: Counsel for the revenue is right in his submission that if the said communication would have been issued to the petitioner at the first instance, there was likely that the petitioner would have withdrawn the amounts lying in the bank account which would not have been in the interest of revenue - It is not in dispute that the copy of the communication was sent to the petitioner simultaneously - At this stage when the powers were exercised by the Commissioner under section 83 read with Rule 159(1), the Commissioner was not required to communicate the reasons for passing order of provisional attachment - The basis on which the Commissioner has formed such an opinion, should be duly recorded on file - Remedy of attachment being, by its very nature, extraordinary, has to be resorted to with utmost circumspection and with maximum care and caution - None of those safeguards set out in the said circular dated 23rd February, 2021 would affect the rights of the petitioner as the said circular though grants power to the Commissioner to record reasons in file, however, with a caution that the power must not be exercised in the routine or mechanical manner and shall be exercised only after careful examination of the facts of the case - In the view of the Bench, the petitioner would be entitled to the copy of the opinion formed by the Commissioner before filing an objection - Respondent no.4 is directed to furnish a certified copy of the opinion/reasons formed by the Commissioner under section 83 of the CGST Act read with Rule 159 of the CGST Rules under clause 3.1.4 of the circular dated 23rd February, 2021 to the petitioner within one week - Petitioner is allowed to raise objection to the same - Respondent no.4 shall grant an opportunity of being heard to the petitioner before passing the final order - Exercise shall be done within two weeks - Petition dismissed with aforesaid directions: High Court [para 18, 20, 21, 22, 28, 31]
Maintainability - In view of the fact that the petitioner has impugned the validity of the circular dated 23 rd February 2021 issued by the respondents, the same cannot be challenged before the Appellate Authority - Bench is, therefore, not inclined to reject the writ petition on the ground of an alternate remedy available to the petitioner under the provisions of CGST Act: High Court [para 30]
- Petition dismissed: BOMBAY HIGH COURT
2022-TIOL-329-HC-DEL-GST
Saurabh Mittal Vs UoI
GST - Allegation against the petitioner is that the fraud involved in the instant case is of Rs 350 crores approximately and around 200 firms are involved in placing fraudulent Input Tax Credit - Respondents submit that looking into the conduct of the petitioner coupled with serious allegations of availing an enormous fraudulent Input Tax Credit, the petitioner is not entitled to any protection or relief from this court as the possibility of the petitioner hampering the investigation at this point in time, cannot be ruled out - Petitioner submits that Respondent No. 3 has embarked upon inquiry, investigation which is beyond its zonal jurisdiction; that summons issued against the petitioner be quashed and set aside; that all proceedings carried out by Respondent no. 1 & 2 including those in relation to the recording of statements etc. in terms of the Notice (s)/ Summon (s) issued under Section 50 PMLA in ECIR MBZO-1/66/2021 to be audio/video graphed in the presence of Petitioner's lawyer at a visible distance (beyond audible range) inter-alia by way of installation of appropriate CCTV cameras.
Held: It is trite law that at the stage of show cause notice, summons, charge sheet or notice to appear, constitutional courts would not interfere as to interject the proceedings and thereby, prevent the authorities from proceeding with - Summons for appearance issued under Section 70 of the CGST Act and the authorization for arrest issued under Section 69 (1) of the CGST Act, do not fall within the ambit of the definition of "Criminal Proceedings", because criminal proceeding commences, only after the launch of prosecution - Court, in exercise of its jurisdiction under Section 482 Cr.P.C . cannot go into the truth or otherwise of the allegations made in the complaint or delve into the disputed question of facts - The issues involving facts raised by the petitioner by way of defence is a matter of investigation/inquiry and the same will have to be adjudicated on merits of the case and not by way of invoking jurisdiction under Section 482 Cr.P.C . at this stage - With regard to the audio/videography of the proceedings to be carried out by the respondents, in the presence of petitioner's lawyer at a visible distance, beyond audible range, inter-alia, by way of installation of appropriate CCTV cameras, is concerned, the same is untenable in law as in the instant case, the petitioner has failed to raise any reasonable basis to apprehend coercion by the respondents herein against the petitioner - Moreover, such directions are to be issued in special facts and circumstances of that case - Keeping in view the fact that the investigation is still at a nascent stage and that the present case involves fraud of Rs 350 crores approximately and around 200 firms are involved in placing fraudulent Input Tax Credit coupled with the fact that one Upender Singh, a bank official at ICICI Bank, Kamla Nagar, has levelled specific allegations against the petitioner and has stated that at the behest of the petitioner and his father, he had opened accounts for these 200 firms without physical verification and further, looking into the conduct of the petitioner, the petitioner is not entitled to any relief from this court - No ground for quashing of the action of the respondents and setting aside of the Summons issued against the petitioner is made out - Also, there is no flaw or infirmity in the territorial jurisdiction of the proceedings - Petition dismissed: High Court [para 17, 18, 20, 22, 23, 24]
- Petition dismissed: DELHI HIGH COURT |
