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by Admin
07 May 2024 2:49 AM
In a significant ruling, the Punjab and Haryana High Court, comprising Hon'ble Ms. Justice Ritu Bahri and Hon'ble Mr. Justice Kuldeep Tiwari, has directed the Commissioner, Central Goods and Service Tax, to refund an amount of Rs. 2.54 crores to Modern Insecticides Ltd. and another party. The court also ordered the supply of a copy of the Panchnama and other electronic gadgets that were seized from the petitioners' premises during a search operation.
The case, bearing CWP No. 8035 of 2021, involved a dispute over the refund claim and the seizure of documents and electronic gadgets by the respondents. The petitioners sought a direction from the court to refund the amount and provide necessary documentation for compliance purposes.
The petitioners argued that the amount was voluntarily deposited by them and that no notice under Section 74(1) of the Central Goods and Services Tax (CGST) Act was served. They contended that the respondents had not initiated proceedings within the specified period and, therefore, should refund the deposited amount.
On the other hand, the respondents claimed that an investigation was still ongoing, and no show cause notice had been issued. They argued that the deposit made by the petitioners was subject to further assessment and determination of tax liability.
After careful consideration, the court examined the relevant provisions of the CGST Act, including Section 74, and Rule 142 of the CGST Rules, 2017. The court relied on the precedent set by a similar case, Vallabh Textiles v. Senior Intelligence Officer and others, wherein it was held that a deposit made during a search could not be deemed as voluntary.
The court ruled in favor of the petitioners, emphasizing that no notice had been issued within the specified period despite the deposit being made. Accordingly, the court ordered the respondents to return the amount of Rs. 2.54 crores to the petitioners, along with simple interest at the rate of 6% per annum from the date of deposit until the payment is made.
Date: 19th April 2023
Modern Insecticides Ltd. and another vs Commissioner, Central Goods and Service Tax and another