HC directed department to refund ITC reversed during midnight search & seizure
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- Last Updated on 4 March, 2023
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Case Details: Shree Ganesh Molasses Trading Co. v. Superintendent, Office of the Commissioner - [2023] 148 taxmann.com 36 (Gujarat)
Judiciary and Counsel Details
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- Ms Sonia Gokani & Sandeep N. Bhatt, JJ.
- Hiren J. Trivedi for the Petitioner.
- Utkarsh R. Sharma for the Respondent.
Facts of the Case
The petitioner was engaged in the business of trading of industrial chemicals, soda ash, silica bicarbonates etc. A search and seizure operation was carried out by the team of the CGST officials. The petitioner’s firm had provided access to all records during the course of search. However, input tax credit lying in electronic credit ledger of petitioner was reversed under coercion and Form DRC-03 was filed illegally/involuntarily during search and seizure operation. It filed writ petition before the High Court and prayed for refund of ITC illegally reversed.
High Court Held
The Honorable High Court noted that at time of issuance of notice, department had made petitioner to reverse ITC and to file DRC-03 in midnight. In the instant case, the department had violated interim directions made in case of Bhumi Associate vs. UOI [2021] 124 taxmann.com 429 which had not been challenged and instruction was issued by CBIC pursuant to Bhumi Associate case which was binding in nature.
Therefore, the Court held that the said reversal of ITC could not be said as voluntary and the department was directed to refund ITC reversed with interest at the rate of 6%.
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