Case Note & Summary
The petitioner, Innovators Facade Systems Ltd., filed a writ petition under Article 226 of the Constitution of India seeking a refund of Rs. 2,50,00,000 deposited under protest during a GST investigation, and challenging the legality of summons issued to its Managing Director. The petitioner is a company engaged in the business of facade systems. During an investigation under Section 70 of the Central Goods and Services Tax Act, 2017, the respondents (GST authorities) issued summons to the Managing Director on 12.10.2022 and 25.10.2022. The petitioner deposited Rs. 2.5 crore under protest on 28.10.2022, allegedly under coercion, without any show cause notice or adjudication order being passed. The petitioner contended that the deposit was made under duress and that no proceedings under Section 73 or 74 of the CGST Act were initiated. The respondents argued that the deposit was voluntary and that the investigation was ongoing. The court analyzed the facts and found that the amount was deposited during the investigation without any adjudication, and the summons were issued on a routine basis. The court held that the deposit was made under coercion and that the respondents could not retain the amount without any adjudication. The court directed the respondents to refund the amount of Rs. 2.5 crore with interest at 6% per annum from the date of deposit until repayment, within four weeks. The court also quashed the summons dated 12.10.2022 and 25.10.2022 as illegal and arbitrary.
Headnote
A) Constitutional Law - Writ Jurisdiction - Refund of Amount Deposited Under Protest - Article 226 of the Constitution of India - The petitioner deposited Rs. 2.5 crore under protest during investigation under Section 70 of the CGST Act, 2017, without any show cause notice or adjudication order. The court held that the amount deposited under coercion during investigation, without any adjudication, is liable to be refunded with interest. (Paras 1-8) B) GST Law - Summons - Validity of Summons Issued to Managing Director - Section 70 of the Central Goods and Services Tax Act, 2017 - The court quashed the summons dated 12.10.2022 and 25.10.2022 issued to the Managing Director of the petitioner company, holding that the summons were issued on a routine basis without any justification and were illegal and arbitrary. (Paras 1-8)
Issue of Consideration
Whether the amount of Rs. 2,50,00,000 deposited by the petitioner during the investigation under Section 70 of the CGST Act, without any show cause notice or adjudication order, is liable to be refunded, and whether the summons issued to the Managing Director were illegal and arbitrary.
Final Decision
The court allowed the petition. Directed the respondents to refund the amount of Rs. 2,50,00,000 with interest at 6% per annum from the date of deposit (28.10.2022) until repayment, within four weeks. Quashed the summons dated 12.10.2022 and 25.10.2022 as illegal and arbitrary.
Law Points
- Refund of amount deposited under protest during investigation
- Quashing of summons issued to Managing Director
- Section 70 CGST Act
- Article 226 Constitution of India
- Coercive recovery without adjudication
