Payments Not Voluntary Under CGST Act; Allegations Against Officers Not Adjudicated; Appeal Dismissed with Modifications.

The HC concluded that the payments made by the company were not voluntary under Section 74(5) of the CGST Act and were involuntarily made. Allegations of high-handed conduct by DGGI officers could not be adjudicated in this proceeding. The writ petition was filed within the statutory period, with no delay or laches. The appeal was dismissed, affirming the learned Single Judge's findings with modifications.

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Issues Involved:
1. Whether the amount was voluntarily paid during the investigation by the company under section 74(5) of CGST ActRs.
2. Whether the amount was recovered from the company during investigation under coercion and threat of arrestRs.
3. Whether the DGGI officers conducted in a high-handed and arbitrary manner during the course of investigationRs.
4. Whether the writ petition filed by the company suffers from delay or lachesRs.

Detailed Analysis:

I. Whether the amount was voluntarily paid during the investigation by the company under section 74(5) of CGST ActRs.
Section 74(5) of the CGST Act allows a person to make a voluntary payment of tax along with interest and a 15% penalty on their own ascertainment or as determined by the proper officer. The court found no material indicating that the amounts of Rs. 15 Crores and Rs. 12,51,44,157/- paid by the company at 4 AM and 1 PM on 30.11.2019 and 27.12.2019 respectively were made voluntarily. The company had communicated to the Department that these payments were made without prejudice and reserved the right to seek a refund, indicating no admission of liability. The court referenced guidelines issued by the Gujarat High Court, which were not followed in this case, further supporting that the payments were not voluntary under Section 74(5). Therefore, the first issue was answered in the negative.

II. Whether the amount was recovered from the company during investigation under coercion and threat of arrestRs.
The court noted that the DGGI officers have powers under Sections 67(1) and 70 of the CGST Act for inspection, search, seizure, and summoning individuals. The company deposited Rs. 15 Crores at 4 AM on 30.11.2019 and Rs. 12,51,44,157/- at 1 AM on 27.12.2019 without admitting liability. The court found no evidence that the amounts were due or any threat of arrest was made, inferring that the payments were involuntarily made. The court cited precedents where amounts collected during investigations without adjudication were deemed refundable. Thus, the second issue was answered by stating that the amounts were paid involuntarily.

III. Whether the DGGI officers conducted in a high-handed and arbitrary manner during the course of investigationRs.
The company alleged high-handed and arbitrary conduct by the DGGI officers, including threats of arrest. However, this was disputed by the Department, which claimed the investigation was conducted cordially. The court noted that specific roles were not attributed to individual officers, and they were not impleaded in the writ petition. As this is a question of fact, it cannot be adjudicated in a summary proceeding under Article 226 of the Constitution. The court emphasized that statutory powers must be exercised reasonably and in good faith. The third issue was left open to be agitated in an appropriate proceeding.

IV. Whether the writ petition filed by the company suffers from delay or lachesRs.
The court held that the rule against entertaining belated claims is a rule of practice, not law, and must be decided based on the facts of each case. Section 54 of the CGST Act provides a two-year limit for claiming refunds. The company filed its refund application within this period and subsequently filed the writ petition when the refund attempts failed. The court found no delay or laches in filing the writ petition. Therefore, the fourth issue was answered by stating there was no delay or laches.

Conclusion:
The court concluded that the amount collected from the company was not voluntary under Section 74(5) of the CGST Act and was made involuntarily. The allegations of high-handed conduct by DGGI officers could not be adjudicated in this proceeding. The writ petition was filed within the statutory period, and there was no delay or laches. The court concurred with the learned Single Judge's conclusion, modified the findings to the extent discussed, and dismissed the appeal.

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