TaxTMI 
TaxTMI 
2026 (7) TMI 221
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.... other persons viz. Gauriben Sankhalva, Shilpaben Sankhalva, Sanjaybhai Sankhalva, Valjibhai Sankhalva and Sankhalva are managing a coaching institute in the name of "Alpha-1 Tuition Classes and Hostel", which provides the coaching services to students studying in 4th and 5th grade in Gujarati Medium. 2.1 A search was undertaken by the GST authorities at the premises of the petitioner on 06.10.2023 under the provision of Section 67(2) of the Act after taking authorization of the Joint Commissioner of State Tax-10, Rajkot. The said search continued till 10.10.2023 and the respondent authorities seized various documents under the process and also recorded the statements of the petitioner. Necessary panchnamas were also drawn. A categorical statement is made in writ petition in paragraph No. 3.2 to the extent that after the panchnama was drawn in presence of the panchas, recording that the petitioner had agreed to pay tax, however, some time was sought in order to make the arrangement of the funds. It is alleged by the petitioner that the petitioner was compelled to make the payment of tax, interest and penalty under duress and threat that too without any adjudication for Financial....
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....e produced on record, the recovery of the tax is coercive, under threat and subsequent rejection of the refund application is also de hors the statue. Thus, it is urged that the action of the respondent may be set aside. 3.1 It is submitted that a temporary registration was also issued in the name of the petitioner however, no notice was given before opening such temporary registration for coercive payment of the tax. He has also referred to the Circular dated 18.11.2019 and urged that the proceedings against the petitioner has been conducted de hors the guidelines issued in the said Circular. 4. Vehemently opposing the present writ petition, learned Assistant Government Pleader has submitted that the writ petition is ill-conceived as vague allegation of coercive recovery is alleged. It is contended that and since the petitioner is having an efficacious alternative remedy of filing an appeal under Section 107 of the Act, the same may be rejected. She has pointed out the record of such proceedings which consists of various panchnamas. She has referred that during the search and after the search was completed, the respondent authority - State Tax Officer along with the panchas ....
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....orities from 06.10.2023 till 10.10.2023 under the provision of Section 67(2) of the Act. Various documents were seized and statements were also recorded by drawing the panchnamas during this period. 5.3 We have extensively perused the contents of the panchnama. The contents of the search proceedings reveal that the petitioner has voluntarily agreed to pay the tax amount since no GST registration was obtained, and the institution was being run sans registration number. In the panchnama recorded on 10.10.2023, the following statement is recorded, which is translated as under: "During the search proceedings, the trader has given a written undertaking. The trader is not registered (URO) under the GST and during the search proceedings, in order to pay the tax liability, he has consented to issue a "temporary number". Thus, it appears on an undertaking given by the petitioner, a temporary GST number was issued for payment of tax. 5.4 At the end of the search proceedings, the respondent authorities along with the panchas, have prepared an order containing questionnaire by referring to various provisions of the Act more particularly, Section 70 of the Act. The relevant qu....
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....at, or intimidation; thereafter, all the answers to the aforementioned question numbers 1 to 18 are exactly as stated by me and are true and correct to the best of my knowledge, and furthermore, during the course of all these proceedings, none of my social or religious sentiments have been hurt, nor has any financial loss been caused to me. In exchange whereof, I affix my signatures on all pages of this statement." 5.9 Thus, from the tenor of the proceedings and panchnamas, we do not find any semblance of coercive recovery or threat issued to the petitioner. It is evident that the petitioner voluntarily discharged the outstanding tax liability, given that he lacked registration under the GST, and collected fees, partly in cash. 6. Keeping these facts in mind, we cannot ignore the subsequent conduct of the petitioner. On 10.10.2023, when the proceedings got over, and he paid the tax, after about 2 years, he woke from the slumber and filed an application seeking refund on 28.08.2025 in form GST RFD-01 claiming refund of tax of Rs. 1,12,74,296/- plus interest at Rs.66,59,890/- plus penalty at Rs.16,91,144/-. For 2 years, the petitioner did not complain about the threat/coercion ....
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....gorized as a deposit under coercion. In this regard, there cannot be a straight jacket and/or a blanket opinion which could, at all, be rendered by the Court as any action taken by the department is required to be tested on its own facts. 11. At this stage, nonetheless, learned Counsel for the petitioner submits that similar issue was raised before the Madras High Court in the case Shri. Nandhi Dhall Mills India (P.) Ltd. v. Senior Intelligence Officer, Director General of Goods & Service Tax, Trichy [2021] 127 taxmann.com 31/86 GST 649 (Madras). We find that the Court in such decision was not confronted with the facts as in the present proceedings and more particularly, the assessee taking a position of addressing such letter (dated 13 October 2022 (supra)), as addressed by the petitioner to the respondents, which was never withdrawn. Our observations in regard to non-applicability of the decision are fortified from reading of paragraph 27 of the said decision. We thus find that such judgment is certainly not applicable in the facts of the present proceedings. 13. We may also observe that when an assessee comes before the Court invoking jurisdiction under Article....
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.... chargeable with tax under sub-section (1) pays the said tax along with interest payable under section 50 and a penalty equivalent to twenty-five per cent. of such tax within thirty days of issue of the notice, all proceedings in respect of the said notice shall be deemed to be concluded." 10. The provisions of sub-section (8) explicate that where any person chargeable with tax, pays the said tax with interest payable under Section 50 of the Act and penalty, all the proceedings in respect of the said notice shall be deemed to be concluded. In the present case, the petitioner had voluntarily paid all the tax amount along with penalty as he was caught red-handed by the GST authorities, operating the institution collecting the fees in cash without any GST registration. The proceedings, thus, concluded on 10.10.2023 when tax liability was satisfied voluntarily. Thereafter, FORM DRC-04 was issued on 19.11.2025. The issuance of FORM DRC-04 under Rule 142 of GST rules, is an acknowledgment of voluntary payment of outstanding tax liability. There is no specific time limit provided under the Rules for issuance of DRC-04. In wake of the fact that the petitioner had accepted his tax liabil....