2026-VIL-1017-KAR
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SGST High Court Cases

GST - Involuntary Payment made during Search and Inspection Proceedings - Refund of involuntary or coercively recovered amount – Based on discrepancy between GSTR-3B and GSTR-7 records, authorities conducted inspection at Petitioner's premises. During inspection and subsequently thereafter, Petitioner made multiple payments through Form GST DRC-03 under alleged provisions of Section 74(5) of CGST Act, 2017 contending that such payments were made under duress and coercive pressure without any pre-dated subsisting tax demand outstanding at relevant time - Whether payments made during course of search, seizure and inspection proceedings can be treated as voluntary payment made by Petitioner under self-ascertainment in terms of Section 74(5) of CGST Act and whether Petitioner is entitled to refund of said amounts along with interest - HELD – It is undisputed fact that prior to search and inspection conducted, no notice was issued nor any proceedings to ascertain, adjudicate or determine tax, interest and penalty payable by Petitioner which indicates there was no occasion for Petitioner to pay amounts voluntarily by way of self-ascertainment, thereby indicating payment was not voluntary - The Rule 142 of the CGST Rules, 2017 specifically stipulates that if a voluntary payment is made under sub-section (5) of Section 73 or Section 74 in Form GST DRC-03, an acknowledgment of such payment is required to be issued by the concerned authorities in Form GST DRC-04. Admittedly, in the present case, the respondents have not issued GST DRC-04 - Further, sub-section (5) of Section 73 or Section 74 is to be made on the basis of own ascertainment of tax by the taxpayer or as ascertained by the proper officer. In the present case, there is no material on record to indicate any manner of assessment that has been made with regard to the tax on the basis of which the amounts that have been paid - Mere proceedings initiated under Section 79 of the Act will not in any manner indicate that the payments made by the petitioner are voluntary - It is clear from sequence of events that even payment made after issuance of notice requiring petitioner to appear personally was involuntary as said notice was not issued under any provision of law - Direction is issued to respondents to refund the aggregate amount paid together with interest at 6% per annum from date of payment till date of refund - The writ petition is allowed
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