12 Apr Delhi High Court Orders Refund of ₹35 Lakh to GST Petitioner, Emphasizing Voluntary Compliance and Due Process
Introduction:
The Delhi High Court’s decision mandates a refund of ₹35 lakh to a GST petitioner, underscoring the significance of voluntary compliance and adherence to due process.
Facts of the Case:
- On January 6, 2023, the petitioner underwent a search operation based on allegations of suppressed transactions, excessive input tax credit claims, and GST evasion.
- The search, conducted on January 7, 2023, compelled the petitioner to reverse an Input Tax Credit of ₹35,00,000 using FORM GST DRC-03.
Issue:
- The central issue pertained to whether the amount recovered during the search operation was voluntarily deposited or coerced, necessitating a refund.
Held:
- Petitioner's Argument: Citing precedent cases, the petitioner argued that the deposit was made involuntarily under coercion, warranting a refund with interest.
- Respondent's Argument: The respondent contended that the deposit was voluntary and proceeded with recovery under Section 73 of the GST Act through a Show Cause Notice.
- Court Judgment: The Delhi High Court ruled in favor of the petitioner, directing the refund of ₹35,00,000 with 6% interest per annum from the date of deposit. The court deemed the deposit as non-voluntary and contrary to guidelines issued by the CBIC.
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