TaxTMI 
TaxTMI 
2022 (3) TMI 625
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....N, ADV., MR. SYED M. PEERAN, ADV., MR. SIDDHARTH BALVE, ADV.,) JUDGMENT ALOK ARADHE J., This intra Court appeal takes an exception to order dated 14.09.2021 passed by the learned Single Judge by which the writ petition preferred by the respondent No.1 has been disposed of with the direction to the appellants to consider the applications for refund submitted by the respondent No.1 and to pass suitable orders thereon within a period of four weeks, in the light of observations made in the order. In order to appreciate the appellants' grievance, relevant facts need mention. 2. The respondent No.1 namely M/s. Bundl Technologies Pvt. Ltd. (hereinafter referred to as 'the Company' for short) operates an e-commerce platform under the brand name of 'Swiggy'. On the aforesaid platform, the consumers can place orders for delivery of food from nearby restaurants, which is made through delivery partners which include pick up and delivery partner (PDP) who are directly engaged by the Company as well as temporary delivery executives (Temp DEs) whose services are procured by the Company through third party service providers. During normal operations, the deli....
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.... the investigation from 28.11.2019 till 30.11.2019, DGGI Officers issued spot summons to the Directors and employees of the Company and their statements were recorded by the DGGI Officers. On 30.11.2019 at about 4.00 a.m., a sum of Rs. 15 Crores was deposited by the Company under the GST cash ledger. On 30.11.2019 itself the Officers of the Company handed over the documents to DGGI officers between 6.45 a.m. to 8 a.m. 6. Thereafter, the Directors of the Company received summon to appear before DGGI office at Hyderabad on 26.12.2019. The Directors of the Company namely Mr.Harsha Majety, Mr.Bharat Arora, Director (Finance and Accounts), Mr.Mehul Shah, Senior Manager (Taxation) and Mr.G.Prahalad, Advocate, visited the office of the DGGI at 11 a.m. Thereafter, statements of Mr.Harsha Majety was recorded. Mr.Rahul Jaimini appeared before DGGI Officers on 26.12.2019 in response to the summons issued to him. The statement of aforesaid Mr.Rahul Jaimini was recorded. Thereafter, Mr.Obul Lakshminandan Reddy appeared at around 4 p.m. on 26.12.2019 in the DGGI office. It is averred that the Directors were present till late hours on 26.12.2019 in the DGGI office and about 8 p.m. were locked ....
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....Company is independent of the process of investigation and two cannot be linked together. Accordingly, the writ petition was disposed of with the direction to consider and pass suitable orders on the applications for refund filed by the Company within a period of four weeks from the date of release of the order. The Department was directed to consider the applications for refund in the light of the observations made in the order. In the aforesaid factual background, this appeal has been filed. 10. Learned ASGI for the appellants submitted that input was received by the Department that Green Finch is a non-existing company and huge input tax credit is being credited to the company. It is further submitted that respondent did not receive any services from Green Finch or its inward suppliers and is therefore not entitled to claim input tax credit on the same. It is also submitted that the Company did not disclose that it has deposited an amount of Rs. 4.74 Crores during investigation in respect of a different issue which was not claimed as refund and therefore, has not approached this Court with clean hands. It is urged that Company voluntarily paid an amount of Rs. 27,51,44,157/- ....
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....that Greenfinch is an non existing entity and that the company had not received any services from Greenfinch is factually incorrect. It is also urged that the amounts were recovered from the company on 30.11.2009 between 6.00 am to 6.30 a.m. and in the mid night hours of 26.12.2019 / 27.12.2019 and the company was compelled to deposit the amount in electronic cash ledger. Thus, it is also urged that under the apprehension of arrest and imprisonment, the amount was recovered from the company. 13. It is contended that recovery of tax during the investigation is illegal and unconstitutional and therefore, the company is entitled to refund of the amount deposited by it under threat and coercion. Our attention has also been invited to the communication dated 30.11.2019 sent by the company to the department and it has been pointed out that the company reserves its rights to claim the refund and the same cannot be treated as admission of its liability. Therefore, it is contended that the amounts has not been deposited in term of Section 71(5) of the Act. It is pointed out that Section 54 of the act provides for time limit of two years from the date of payment for the claim of refund an....
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....tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice. XXX (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. Thus Section 74(5) of the Act gives an option to a person to make payment of tax, along with interest and 15% of penalty on its own ascertainment of the tax ascertain....
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....y. The relevant extract of communication dated 30.11.2019 reads as under:- BUNDL TECHNOLOGIES PRIVATE LIMITED Registered Office, 4th Floor, Annex Building, Maruthi Chambers, Survey No.17/9B Begur Hobli, Roopana Agrahara, Bengaluru, Karnataka, India 560068 CIN:U74110KA2013PTC096530 November 30, 2019 To, The Office of the Commissioner, Directorate General of Goods and Service Tax Intelligence, Hyderabad H.No.1-11-222/4, Lane Opp.HDFC Bank Nalli Silks, Begumpet, Hyderabad-500016. Sub: Submission related to investigation Ref: Inspection dt:28/29 November 2019 by DGGSTI Officials at BTPL's offices situated at Bangalore, Gurugram and Hyderabad. Dear Sir, XXXXX As an extension of our goodwill conduct and bonafide, we have deposited INR 15,00,00,000/- (Rupees Fifteen Crores Only) with the Exchequer of Government during the pendency of inspection proceedings. The above deposit is without prejudice to and with full reservation of our rights and contentions to seek necessary refund at the appropriate time and therefore, should not be regarded as an admission of liability. The challan of payment of....
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....ERCION AND THREAT OF ARREST? 22. The officers of the Department have power of Inspection, search and seizure u/s 67(1) of CGST Act whereas Section 70 of the Act confers the power on the authority to summon person to give evidence as well as to adduce evidence. The relevant extract of Section 67(1) and Section 70 of the Act read as under: 67. Power of inspection, search and seizure. (1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that - (a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand , or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or (b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act. He may authorise in writing any ....
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....re is no iota of material on record to indicate that on the day that the company made payment of the amount, any amount was due to the department. Therefore, it can safely be inferred that payment of the amount was made involuntarily. There is also no material on record to hold that any threat of arrest was extended to officers of the company. 25. The question whether any threat was extended to officers of the company is a question of fact which can't be adjudicated in a summary proceeding under Article 226 of the Constitution of India. Liberty is reserved to the parties to agitate the issue of threat and coercion in an appropriate proceeding. Accordingly the second issue is answered by stating that amounts were paid by the company involuntarily. (III) WHETHER THE DGGI OFFICERS CONDUCTED IN A HIGH HANDLED AND ARBITRARY MANNER DURING THE COURSE OF INVESTIGATION? 26. DGGI officers have invoked the provisions under section 67(1) of the CGST Act relating to inspection, search and seizure and have issued summons under Section 70 of CGST Act to officers of the company to give evidence. The company has taken a stand in the writ petition that during the course of investigation....
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.... ROHTAS LIGHT RLY CO. LTD V. DISTRICT BOARD BHOJPUR (1992) 2 SCC 598 AND ROYAL ORCHID HOTELS V. G. JAYARAM REDDY (2011) 20 SCC 608). 29. Section 54 of CGST Act deals with refund of tax. Section 54(1) of the Act is extracted below: 54. Refund of Tax: (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed: Thus, an application seeking refund of any tax and interest if any, under the Act has to be made within a period of two years. 30. In the backdrop of well settled legal principles and the statutory provision we may advert to the facts of case in hand. The Company deposited a sum of Rs. 15 Crores at about 4.00 a.m. on 30.11.2019 and a sum of Rs. 12,51,44,157/- on 27.12.2019. The company filed an application seeking refund on 29.09.2020. Thereafter the company filed an application seeking refund on 16.12.2020 on 16.12.2020 before jurisdictional GST authority. The Company requested the department to refund the amount. When the attempts of the company to seek refund did ....