TaxTMI 
TaxTMI 
2022 (3) TMI 1205
X X X X Extracts X X X X
X X X X Extracts X X X X
....roprietor Sheik Dawood. Thereafter, the petitioner's proprietor was also arrested on 01.09.2021 and remanded to judicial custody. It is further case of the petitioner that Statements were obtained from the proprietor of the petitioner and during interrogation a letter dated 31.08.2021 was extracted from the petitioner's proprietor on 01.09.2021 to make it seem as if on the petitioner's request, one of the customer namely, Nobal Tech Industries Pvt. Ltd., was to remit amounts due to the petitioner as outstanding to be directly paid into the petitioner's aforesaid GSTN Account bearing No. GSTN : 33ASMPS4462L1Z6. 4. It is the case of the petitioner that this letter was obtained under coercion and therefore, the amounts which is lying in the electronic ledger of the petitioner has hampered with day-to-day business of the petitioner inasmuch as it has resulted in a liquidity crunch and the petitioner is unable to pay either to the suppliers or pay salary to the employees. 5. It is further submitted that after the proprietor of the petitioner was arrested on 01.09.2021, this writ petition was prepared on 07.09.2021 and filed on 09.09.2021 and thus, the petitioner has wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of CGST Act, 2017 and adjudicate to same in the manner prescribed under the said Act. He further submits that this provision is similar to 11 A of the Central Excise Act, 1944 and 73 of Finance Act, 1994. He therefore submits that recovery of tax can be only in the manner known to law and therefore recovery of the amount as tax would be contrary to Article 265 of the Constitution of India. The learned Counsel for petitioner has also placed reliance on the decisions of the Bombay High Court and the Chattisgarh High Court in the following two cases: 1) New India Civil Erectors Pvt. Ltd., Vs. Union of India reported in 2020 (43) G.S.T.L. 17(Bom.). 2) S.Kumar's Associates Vs. Addl. Commr. (Prev.) of Cus., C.Ex. & S.T., Bilaspur reported in 2020 (38) G.S.T.L.29(Chattisgarh). 10. Defending the action of the petitioner, the learned counsel for the respondent submits that under the provisions under the CGST Act, 2017 there is a special dispensation and therefore, the decisions cited by the learned counsel for petitioner are not of no relevance. The learned counsel for respondent submitted that the petitioner has himself admitted and had given a voluntary statement on 31.08.2021 a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....respondent further submits that the investigation will take some more time and therefore, there should not be any concession given to the petitioner as the petitioner has admittedly indulged in large scale fraudulent availing of credit on the strength of fake and fictitious invoices. The learned counsel for the respondent has relied on the following decisions: i. S.S.Industrie Vs. Union of India MANU/GJ/1609/2020 ii. Radha Krishnan Industries Vs. State of Himachal Pradesh and Ors. MANU/SC/0293/2021 iii. Sri Marg Human Resources Pvt. Ltd. Vs. The Principal Additional Director General and Ors. Order in W.P. No.11284 of 2021 dated 26.05.2021. iv. The Principal Additional Director General and Anr. Vs. Sri Marg Human Resources Pvt. Ltd. v. P.V. Ramana Reddy and Ors. Vs. Union of India MANU/TL/OO64/2019" 14. The learned counsel for the respondent submits that since under Section 79 of the of the CGST Act, 2017 there is a special dispensation for the Department to initiate such recovery proceedings even before there is a proper determination of tax liability, the writ petition filed for the relief is devoid of merits. 15. By way of rejoinder, the learned counsel for the petiti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....me." 22. The petitioner here indeed asking for refund of the amount which has been credited into the petitioner's GSTN account. Whether the amounts was directed to be paid by the petitioner's aforesaid customer namely Nobal Tech was under coercion or it was a voluntarily paid at the behest of the petitioner is a disputed question of fact which cannot be decided in a summary proceedings under Article 226 of the Constitution of India. For claiming refund of any amount lying in excess the petitioner has to work out the remedy under Section 54 of the CGST Act, 2017. Section 54 of the CGST Act, 2017 reads as under: Section 54. Refunds; "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: Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-Section (6) of Section 49, may claim such refund in the return furnished under Section 39 in such manner as may be prescribed." 23. To implement the aforesaid scheme, under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to submit objections on the ground that the property was or is not liable to attachment; and (b) An opportunity of being heard; (ix) There has been a breach of the mandatory requirement of Rule 159 (5) and the Commissioner was clearly misconceived in law in coming into conclusion that he had a discretion on whether or not to grant an opportunity of being heard; (x) The Commissioner is duty bound to deal with the objections to the attachment by passing a reasoned order which must be communicated to the taxable person whose property is attached; (xi) A final order having been passed under Section 74 (9), the proceedings under Section 74 are no longer pending as a result of which the provisional attachment must come to an end; and (xii) The appellant having filed an appeal against the order Under Section 74 (9), the provisions of Sub-Section 6 and 7 of Section 107 will come into operation in regard to the payment of the tax and stay on the recovery of the balance as stipulated in those provisions, pending the disposal of the appeal." 24. As per Rule 86(1) Electronic Credit Ledger shall be maintained in FORM GST PMT-02 for each registered person eligible for input tax credi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es, 2017. 28. Even otherwise, considering the fact that there are serious allegations against the petitioner of having an availed fraudulent input tax credit in the Electronic Credit Ledger on the strength of bogus and fictious input tax invoice for discharging GST liability, with no supply, no refund can be ordered straight away in this proceedings. 29. At the same time, the invocation of Section 79(1)(c) at the moment is pre-mature. Recovery under Section 79 of the Act has to be in accordance with Chapter XVIII of CGST Rules, 2017. Recovery under Section 79(1)(c) of the Act has to be in consonance with Rule 145 of the CGST Rules, 2017. For an easy refer, both the provisions are re-produced below:- Section 79(1)(c) of the Act Rule 145 of the Rules 79. (1) Where any amount payable by a person to the Government under any of the provisions of this Act or the rules made thereunder is not paid, the proper officer shall proceed to recover the amount by one or more of the following modes, namely:-- (a) .......... (b) ......... (c) (i) the proper officer may, by a notice in writing, require any other person from whom money is due or may become due to such person or who holds or m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or is the money demanded or any part thereof, likely to become due to the said person or be held for or on account of such person, nothing contained in this section shall be deemed to require the person on whom the notice has been served to pay to the Government any such money or part thereof; 145. Recovery from a third person.- (1) The proper officer may serve upon a person referred to in clause (c) of subsection (1) of section 79 (hereafter referred to in this rule as -the third person?), a notice in FORM GST DRC-13 directing him to deposit the amount specified in the notice. (2) Where the third person makes the payment of the amount specified in the notice issued under sub-rule (1), the proper officer shall issue a certificate in FORM GST DRC14 to the third person clearly indicating the details of the liability so discharged. 30. The figures given in the counter affidavit regarding the alleged evasion of tax liability on the strength of bogus invoice is mind-boggling and shows inherent weakness in the system and how the system is capable of being manipulated and systematically abused by unscrupulous person. The respondent has to strengthen Rules and plug the loop holes so th....