The Delhi High Court, in the case of SANTOSH KUMAR GUPTA PROP. MAHAN POLYMERS (The Petitioner) Vs. UNION OF INDIA THROUGH SECRETARY (The Respondent), ordered the refund of GST paid involuntarily and under coercion.
The person filing this petition operates a PVC resin trading business called M/s Mahan Polymers as a sole proprietorship. Registered under the Central Goods and Services Tax Act, they’ve been assigned the GST Identification Number: 07AAPPG5295A1ZP.
The petition challenges a search conducted at their business premises (3460/1, Jai Mata Market, Tri Nagar, Delhi-110035) under Section 67 of the CGST Act, authorized via FORM GST INS-01 dated 11.11.2022. Allegedly, during this search, the petitioner was compelled to deposit ₹10,00,000/- (₹5,00,000 under the CGST Act and ₹5,00,000 under the Delhi Goods and Services Tax Act, 2017 (DGST Act).
They seek directives for the refund of this amount, claiming it was collected unlawfully. Furthermore, they request the provision of a copy of FORM GST INS-01.
In this case, the discovery that the petitioner claimed purchases from a supplier who, upon investigation, appeared non-existent at their primary business location, strongly suggests the petitioner might have wrongly utilized Input Tax Credit (ITC).
Based on this, it’s been determined that there’s insufficient reason to deem the search or inspection conducted on 12.11.2022 as unlawful or flawed due to the absence of evidence indicating the petitioner’s unlawful ITC use.
Additionally, respondent no. 3 asserts that no search occurred at the petitioner’s premises. The counter affidavit filed on behalf of the respondents affirms that no summons was issued to the petitioner, nor was their statement recorded on 12.11.2022.
The petitioner’s argument that the inspections by the central officers were illegal lacks merit. According to Section 6(2)(b) of the CGST Act, prior inspections or searches conducted by DGST authorities don’t prevent central officers from inspecting to conclude an ongoing investigation.
The petitioner deposited Rs. 10,00,000 via FORM GST DRC-03 around 9:00 pm during an inspection by respondent no. 3 officers. Soon after, on November 14, 2022, they claimed through a letter that this deposit was made against their will and under duress.
It’s undisputed that the submission of FORM GST DRC-03 occurred using the visiting team’s laptop. Notably, the petitioner filed the present petition for a refund of this amount within ten days on November 23, 2022.
Considering these facts, the court directed the respondents to refund the Rs. 10,00,000 deposited by the petitioner through FORM GST DRC-03 on November 12, 2022.
Read Also:- How to File GST Refund Claims Manually? Step-by-Step Guide
However, the court specified that this order doesn’t prevent the respondents from taking necessary actions to safeguard Revenue interests, including issuing an order under Section 83 of the CGST Act or Rule 86(A) of the Central Goods and Services Tax Rules, 2017, provided the conditions for exercising such powers are met.
| Case Title | Santosh Kumar Gupta |
| Citation | W.P.(C) 17171/2022 |
| Date | 05.12.2023 |
| For the Petitioner | Mr. A. K. Babbar & Mr. Surender Kumar, Advs. |
| For the Respondents | Mr. Rajeev Aggarwal, SC with Ms. Shilpa Singh, Adv. |
| Delhi High Court | Read Order |