Justice Anitha Sumanth said that the tabulation of payments, in this case, is joint, the petitioner offering a sum of Rupees Seven Crores (since retracted) and the Officer to ascertain the balance. This exercise has not been carried out and, with this, the requirement of ‘ascertainment’ under Section 74(5), fails

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Madras High Court directs GST Dept. to Refund Rs.2 cr paid at the time of Investigation [Read Order]

By Mariya Paliwala – On April 18, 2021 9:09 am
Madras High Court – GST Dept – Refund – Investigation – Taxscan

The Madras High Court directed the GST Department to refund Rs.2 crores paid at the time of investigation.

The petitioner, Nandhi Dhall Mills India Private Limited filed the writ petition seeking a mandamus restraining the respondent authority from harassing the petitioner baselessly without addressing its grievance petition and refund claim pending before the respondents. The respondents are officials of the Director General of Goods and Service Tax.

The petitioner has made serious allegations about the high handedness of the authorities during the conduct of search and the scant regard expressed for the sentiments of the family of the Managing Director and employees of the petitioner. They state that the visit was on the eve of Deepavali and investigation was carried out in an intrusive and acrimonious fashion. The petitioner, leave alone celebrating the festival, could not even disburse bonus and gifts to its employees. In all, not just high handedness, but also malafides is attributed in the conduct of the proceedings.

The allegations have been strenuously denied by the respondents. According to the respondents, the petitioner has been engaging in large scale tax evasion and has not been paying tax that it is legitimately bound to pay. It was for this reason that it had voluntarily offered to remit tax. The very fact that the petitioner had remitted not one but two instalments of tax would reveal that the payments were voluntary as, if they had been coerced as alleged, the payments would have stopped with the first instalment. They would also state that there has been no cooperation extended by the petitioner in the proceedings for enquiry and no appearances/compliance with the summons issued and it is for this reason that the proceedings for investigation are being delayed.

The single-judge bench of Justice Anitha Sumanth said that the tabulation of payments, in this case, is joint, the petitioner offering a sum of Rupees Seven Crores (since retracted) and the Officer to ascertain the balance. This exercise has not been carried out and, with this, the requirement of ‘ascertainment’ under Section 74(5), fails.

The court held that the mandamus as sought for by the petitioner is issued. The amount collected, of Rupees Two Crores shall be refunded to the petitioner within a period of four (4) weeks from today.

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