DRC-03 Payment Under Audit Pressure — Can Refund Be Claimed?

[MAHTAB KHAN]

During audit, CGST officers pressurized the assessee to deposit ?1,84,629 through DRC-03 for alleged excess ITC availment. Later, we verified and found the allegation is incorrect. No SCN or adjudication order was issued — only payment during audit. Can we claim refund of this amount under Section 54 as “excess payment of tax,” and what is the best legal approach to prove it was paid under protest?

 

AI Summary

Payment under audit pressure: refund may be claimed where deposit was involuntary and lacked adjudicatory recovery procedure.
Payments via DRC-03 during audit are treated as voluntary portal-initiated payments, but statutory recovery requires prior notice and adjudication; absent adjudication, forced recovery is impermissible. If a taxpayer paid under coercion, they should record and communicate that the payment was made under protest, apply for refund as an excess tax payment, and raise the involuntariness of the deposit during any ensuing adjudication while seeking administrative inquiry into coercion.