2026-VIL-679-GUJ
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SGST High Court Cases

GST - Voluntary Payment or Coercive Recovery, Refund Claim - Petitioner was searched by GST authorities and voluntarily agreed to pay outstanding tax liability after being issued a temporary GST registration number. The petitioner filed a refund application nearly two years after the payment, claiming the amount was recovered coercively under duress and threat - Whether the tax payment made during search proceedings was voluntary or coercive, and whether the respondent authority was justified in rejecting the refund application – HELD - The tax payment was entirely voluntary as evident from the detailed panchnama and statements recorded during the search proceedings wherein the petitioner explicitly stated in writing that he was not under any pressure, coercion, threat, or intimidation and was ready to pay the quantified amount. If the petitioner was genuinely coerced, as a prudent legal person, he would have lodged complaints or representations with superior authorities or police within a reasonable time, but he remained silent for approximately two years before raising the allegation of coercive recovery as an afterthought - The principle established in Innovators Facade Systems Ltd case is that if a taxpayer was genuinely coerced, as a prudent legal person, would have resorted to filing complaints or representation to authorities, and since petitioner did not do so, the allegation of coercive recovery cannot be believed. Additionally, questions of fact regarding whether coercive methods were adopted cannot be conclusively ascertained in writ petition proceedings under Article 226 of the Constitution - The issuance of Form DRC 04 was a mere acknowledgment of voluntary payment and caused no prejudice. The refund application rightly stood rejected as the petitioner failed to establish eligibility under Section 54 of the CGST Act, as the amount was voluntarily paid for quantified tax liability calculated based on material examined during search – The writ petition is dismissed
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