Refund of Amount deposited in Protest

[ROHIT GOEL]

Dear experts,

A search action under GST was conducted on the company during which questioning was done regarding purchases from specific parties. Company produced complete documents in support of bonafide purchase including Bills, transport receipts, eway bills, GRN etc. Despite the same, company was made to deposit tax under pressure by search team via DRC-03u/s 73.

After search, bank accounts of the company have been provisionally attached u/s 83. However, no proceedings u.s 73 or 74 of the Act have been initiated till date and business of company is shut down due to this.

Your opinion is requested as to whether:

a) Company should deposit further DRC-03u/s 73(5) of certain amount and mention that same is only being done under protest to release attachment of bank account. Whether there remains possibility of refund of such tax in future if upon adjudication, case is decided in company's favor. Whether this case would be covered u/s 54 once tax is paid u/s 73(5)?

OR

b) File Writ Petition in High Court seeking release of attachment of accounts when no adjudication proceedings u/s 73 or 74 have been initiated till date and no demand has been determined?

OR

c) Any other suggested remedy so that business can be continued and no further tax is being paid until final demand/adjudication proceedings

[KASTURI SETHI]

Sh.Rohit Goel Ji,

On which date search was conducted ?

Whether confessional statement was recorded ? If so, will confessional statement and 'under protest' not be contradictory ?

Are doubly sure about bona fides of your client ?

If confessional statement was under pressure as mentioned by you, was it withdrawn within 24 hrs. ?

[KASTURI SETHI]

This case law can help you.

2021 (1) TMI 1013 - DELHI HIGH COURT ELECTRO DEVICES PVT. LTD. VERSUS ADDITIONAL DIRECTOR GENERAL, DIRECTORATE GENERAL OF GST INTELLIGENCE & ANR.

AI Summary

Refund of tax deposited under protest: may be pursued after adjudication; consider challenge to provisional bank attachment to continue business. Whether a taxpayer should deposit tax under protest to secure release of provisionally attached bank accounts and retain the possibility of refund if adjudication later finds no liability, versus challenging the attachment without further payment; practical risks include any confessional statement recorded during search and its effect on protest payments and subsequent remedies.