Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P.
MONDAY, THE 22ND DAY OF JULY 2024 / 31ST ASHADHA, 1946 WP(C) NO. 23987 OF 2024 PETITIONER/S:
AZEEZ HOTEL, 42/781, POOJAPPURA, THIRUVANANTHAPURAM REPRESENTED BY ITS PROPRIETOR SRI. NOUFAL RASHEED, PIN - 695012 BY ADVS.
AJI V.DEV ALAN PRIYADARSHI DEV S.SAJEEVAN RESPONDENT/S:
1 THE ENFORCEMENT OFFICER, ENFORCEMENT SQUAD, STATE TAX, STATE G.S.T. DEPARTMENT, REVENUE TOWER, NEDUMANGADU THIRUVANANTHAPURAM (DISTRICT), PIN - 695541 2 COMMISSIONER OF STATE TAX, TAX TOWERS, KARAMANA THIRUVANANTHAPURAM, PIN - 695002 3 THE BRANCH MANAGER, INDUSIND BANK, POOJAPPURA BRANCH, SIMLA, MAIN ROAD, POOJAPPURA- THIRUVANANTHAPURAM, PIN - 695012 SMT. JASMINE M.M, GP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 23987 OF 2024 2 JUDGMENT
Petitioner is a registered dealer under the CGST/SGST Acts, engaged in the running of a small- scale restaurant at Thiruvananthapuram. The petitioner has approached this Court with a grievance that, on 27.06.2024, while conducting an inspection/search under Section 67 of the CGST/SGST Acts, the 1st respondent obtained a cheque bearing No.949164 dated 27.06.2024 drawn on the account maintained by the petitioner with the IndusInd Bank, Poojappura branch for a sum of Rs.15,00,000/- (Rupees Fifteen lakhs only) under threat and coercion and on the premise that there is large scale suppression of turn over and short payment of tax. It is the submission of the learned counsel for the petitioner that such mode of collecting money from a registered dealer is not contemplated by the provisions of the CGST/SGST Acts and the Rules made thereunder.
Reference is made to the provisions of Section 73(5) and 74(5) of the CGST/SGST Acts to contend that it is only when voluntary payments are made can such amounts be
WP(C) NO. 23987 OF 2024 3 collected without adjudication.
2.
The learned Government Pleader refers to the provisions of Rule 87 of the CGST Rules to contend that even the Rules contemplated a situation where the cheque or other security is obtained by the officer during the course of an investigation. It is submitted that this is done to protect the revenue and to ensure that there is no evasion of tax legally payable to the Government.
However, it is submitted that in the facts of the present case, the Department proposes to complete an adjudication in accordance with the law, in terms of the provisions contained in Section 73 of the CGST/ SGST Acts and the demand against the petitioner will be finalized only in terms of the adjudication order to be passed by the competent authority. The learned Government Pleader also submits that the cheque issued by the petitioner was a voluntary act of the petitioner and there was not threat or coercion.
3.
Having regard to the submissions made across the bar and having regard to the facts and circumstances
WP(C) NO. 23987 OF 2024 4 of the case and without going into the merits of the contentions taken by either side, this writ petition will stand disposed of directing that cheque bearing No.949164 dated 27.06.2024 drawn on the account maintained by the petitioner with the IndusInd Bank, Poojappura shall be returned by the 1st respondent to the petitioner, on the petitioner approaching the 1st respondent for the same. Any demand against the petitioner shall thereafter be adjudicated after following the procedure contemplated by Section 73 of the CGST/SGST Acts. The petitioner shall co-operate with such adjudication and any recovery against the petitioner will be based on the orders to be issued by the adjudicating authority.
The writ petition is disposed of with the aforesaid directions.
Sd/- GOPINATH P.
JUDGE ajt/DK
WP(C) NO. 23987 OF 2024 5 APPENDIX OF WP(C) 23987/2024 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE REGISTRATION CERTIFICATE ISSUED TO THE PETITIONER DATED: 01-09-2023 Exhibit P2 TRUE COPY OF THE MONTHLY RETURN FILED FOR MARCH (2023-24) Exhibit P2(a) TRUE COPY OF THE MONTHLY RETURN FILED FOR APRIL (2024-25) Exhibit P3 TRUE COPY OF THE SEIZURE REPORT ISSUED IN FORM GST INS-02 DATED: 27-06-2024 WITH TYPED COPY Exhibit P4 TRUE COPY OF THE LETTER FILED DATED: 01-07- 2024 BY THE PETITIONER BEFORE THE 1ST RESPONDENT Exhibit P5 TRUE COPY OF THE CIRCULAR ISSUED AS INSTRUCTION NO-01/2022-23(GST-INVESTIGATION) DATED: 25-05-2022 Exhibit P6 TRUE COPY OF THE JUDGMENT IN ATR MALLEABLE CASTING PRIVATE LIMITED & ORS. VS. INSPECTOR OF CENTRAL TAXES, HEADQUARTERS, ANTI-EVASION UNIT, HALDIA CGST & CX COMMISSIONERATE & ORS (2024 (6) TMI 1258 - CALCUTTA