AI Drafter 
TaxTMI 
TaxTMI 
2024 (10) TMI 790
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.... abuse of power declaring that the recovery of Rs.2.50 crores under Section 74 (5) of CGST Act as being illegal; to quash the statements coercively taken by the respondents from the petitioner as being illegal; pending investigation direct that there should be no further recovery; direction to the respondents to furnish copies of the statements attributed to M/s Raj Chemicals; direction for investigation being carried out be transferred to Mumbai jurisdiction; and imposing of exemplary costs on respondent Nos. 1 and 2 for causing mental agony. 2. Though the petitioner has sought for multiple reliefs, it is clear that they have confined their relief for refund of the amount of Rs.2.50 crores collected, while keeping open the other contentions in light of pending adjudication initiated by issuance of show cause notice. 3. The context in which proceedings were initiated by the respondents was that during investigation of M/s. Raj Chemicals, the statements of Sri Vijay Kumar Gupta one of the partners of M/s. Raj Chemicals, was stated to have been recorded under Section 70 of the CGST Act. It is stated that the said statement of Sri Vijay Kumar Gupta had referred to supplies made ....
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....urances that he will rejoin working hours next day. The office is 150 sq ft. 2 officers along with the staff of the Petitioner and Petitioner himself spent the night in the office. The Petitioner had to sit all night. (Details mentioned at para 23 onwards in the Petition). 6. 30.07.21 11.30 a.m 3 officers along with Respondent No 2 arrive at the office premises. The Petitioner was physically removed from his chair and the same was taken by Respondent No 2. Investigation and threats of arrests continued with renewed gusto. 7 30.07.21 Evening The statement was being typed by the Respondents and the Petitioner was not allowed to even read the same properly. Only cosmetic changes about personal details were allowed. They were forced to sign the statement failing which he was threatened with arrested (sic). Finally after detention and ill treatment in his own office for close to 2 days, Petitioner agreed under pressure to arrange ad hoc 1,00,00,000/- to pay as soon as the bank opens and agreed to come to Bengaluru for which summons would be issued. 8 31.07.21 12.30 a.m Late in th....
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....ere he was directed to note down the entire details in an Affidavit and file an interim retraction affidavit till the Statement is received. H Page 149 14 16.09.21 Petitioner filed Writ Petition before the Hon'ble Karnataka HC. 15 30.09.21 Hon'ble HC, grants protection to the Petitioner from coercive recovery and Petitioner agrees to cooperate with Investigation. 16 01.12.22 SCN issued by the DGGI transferred to Nodal Officer. Petitioner never called again after attendance on 03-08-21. The Petitioner has complied with each and every detail in the SCN and attended on various occasions. Copy to be presented in Court 5. It is the further stand of learned counsel for the petitioner Ms. Nikita Badheka that they are cooperating in the investigation pursuant to the order of 30.09.2021 passed in the writ petition restraining the respondents from taking coercive steps compelling the petitioner to pay amounts during the course of investigation. 6. It is the stand of the petitioner that statements taken/recorded at 12.30 am on 31.07.2021 and during the summons proceedings at Bengaluru on 03.08.202....
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....t the retraction of the statements was belated and there is no explanation for delayed retraction of the statements. 15. The department has specifically contended that the payment made under Section 74 (5) read with Rule 142(2) of the GST Rules would be dealt with or adjusted by the department in accordance with Section 74 of the CGST Act. The revenue has further asserted that the DRC-03 specifically indicates nature of payment being 'voluntary' at serial No.3 and has accordingly sought for dismissal of the petition. 16. It is to be noticed that the petitioner has sworn to an Affidavit on 10.08.2021 clearly retracting the voluntary statements stated to have been made before the Authorities specifically asserting that statements stated to have been recorded during investigation were given under duress and coercion. It is specifically asserted in the said Affidavit that the petitioner had visited the Investigation Branch of the Bengaluru Unit on 29.07.2021 and in the continued extended investigation, statement was recorded in the early hours of 31.07.2021. It is stated that the petitioner was not permitted to make any substantive changes to the statement recorded and when he si....
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.... 74 (5). 21. Upon such payment, in terms of Section 74 (5) of the CGST Act, the Proper Officer in terms of Section 74 (6) is barred from serving any notice under sub-section 74 (1), though in terms of Section 74 (7), whether Proper Officer is of the opinion that the amount paid under Section 74 (5) falls short of the amount payable, he shall proceed to issue notice under Section 74 (1). 22. Section 74 (7) of the CGST Act states that, "74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful misstatement or suppression of facts.- xxxx (7) Where the proper officer is of the opinion that the amount paid under subsection (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. (emphasis supplied) 23. In terms of Section 74 (8), once the person chargeable with tax pays tax, interest and penalty "... all proceedings in respect of the said notice shall be deemed to be concluded." 24. It must be noted that the ....