Tax deposit coercion claim by corporate taxpayer rejected where contemporaneous voluntary conduct undermined duress and required factual inquiry

The dominant issue is whether the tax deposit was made under coercion and thus susceptible to setting aside in a writ under Article 226. The HC reasoned that as a corporate legal person it cannot be physically coerced; any coercion would concern officers and is a factual question. The petitioner's contemporaneous conduct (voluntary deposit, agreement to pay balance, acknowledgement of outstanding tax, failure to complain to authorities) undermined any claim of duress. Because disputed factual findings on coercion cannot be resolved in Article 226 proceedings, the writ petition is rejected.

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Issues:
The issues involved in the judgment are coercion in depositing a certain amount by the petitioner, legality of the actions of the respondents, and the applicability of previous court decisions in similar cases.

Coercion in Deposit:
The petitioner claimed to have been coerced into depositing an amount of Rs. 2,50,00,000/- by the respondents. However, the court found that the petitioner voluntarily deposited the amount as evidenced by a letter dated 13 October 2022. The court noted that the petitioner did not raise any complaints or representations regarding coercion, and the actions of the petitioner did not support the claim of coercion. The court emphasized that the petitioner, being a legal person, could have taken appropriate legal actions if coercion was involved.

Legality of Respondents' Actions:
The court highlighted that the petitioner, a legal entity, cannot be physically coerced, and any alleged coercion would pertain to its representatives or officers. The court found that the petitioner's conduct, including voluntarily depositing the amount and acknowledging outstanding tax liabilities, did not support the claim of coercion. The court emphasized that in cases where substantial taxes are due, voluntary deposits by the assessee to avoid legal proceedings are not uncommon in tax jurisprudence. The court also noted that no show cause notice had been issued at the time of the petition, and the investigation was ongoing.

Applicability of Previous Court Decisions:
The court discussed the applicability of previous court decisions in similar cases, such as the Madras High Court and Gujarat High Court judgments. The court distinguished the facts of the present case from those in the previous decisions, emphasizing the unique circumstances and evidence presented. The court concluded that the previous judgments were not applicable to the current proceedings due to differences in facts and legal positions. The court reiterated that the question of coercion in depositing tax amounts is a disputed question of fact and cannot be conclusively determined in proceedings under Article 226 of the Constitution.

Conclusion:
In conclusion, the court found the petition to be misconceived and rejected it, stating that no costs were awarded. The court emphasized that the proceedings under Article 226 of the Constitution cannot convert into civil suit proceedings requiring evidence appreciation. The court underscored the need for clear and compelling evidence to support claims of coercion in tax deposits, which was lacking in the present case.

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