Case Note & Summary
The petitioner, M/s. Bundl Technologies Private Limited, a company engaged in e-commerce, filed a writ petition under Article 226 of the Constitution of India seeking a mandamus directing the respondents to refund an amount of Rs.27,51,44,157/- which was allegedly illegally collected during a GST investigation. The respondents included the Union of India, the Directorate General of Goods and Services Tax Intelligence (DGGI), and various officers. The petitioner contended that the amount was collected under coercion and threat of arrest without any adjudication order or show cause notice, and that the recovery was without authority of law. The respondents argued that the payment was made voluntarily under Section 74(5) of the CGST Act as self-ascertainment of tax liability, and that the petitioner had an alternative remedy under the GST Act. The court analyzed the facts and found that the amount was collected during investigation without any adjudication, and that the petitioner had paid under protest. The court held that the recovery was illegal and violative of Article 265 of the Constitution, which prohibits tax collection without authority of law. The court distinguished the payment from voluntary self-ascertainment under Section 74(5), noting that such provision applies only when the taxpayer voluntarily discloses liability before any investigation. The court also emphasized the right to dignity of taxpayers under Article 21 and directed that future investigations be video recorded. The court allowed the petition, directing the respondents to refund the amount with interest at 6% per annum from the date of collection till payment, within four weeks.
Headnote
A) Constitutional Law - Writ of Mandamus - Refund of Tax Collected Without Authority of Law - Article 226 of the Constitution of India - Petitioner sought refund of Rs.27,51,44,157/- collected during GST investigation without any adjudication order - Court held that recovery without adjudication is illegal and violative of Article 265, and directed refund with interest - Held that alternative remedy is not a bar when fundamental rights are infringed (Paras 4-10). B) Goods and Services Tax - Self-ascertainment under Section 74(5) of CGST Act - Section 74(5) of Central Goods and Services Tax Act, 2017 - Petitioner paid amount under protest during investigation claiming it was coerced - Court observed that self-ascertainment under Section 74(5) requires voluntary payment before notice, not during investigation under threat of arrest - Held that payment made under coercion cannot be treated as voluntary self-ascertainment (Paras 11-15). C) Constitutional Law - Right to Dignity - Treatment of Taxpayer - Article 21 of the Constitution of India - Petitioner alleged harassment and threat of arrest during investigation - Court emphasized that bona fide taxpayers must be treated with dignity and not subjected to coercive tactics - Held that investigating authorities must act within bounds of law and respect fundamental rights (Paras 16-20). D) Goods and Services Tax - Video Recording of Investigation - Section 70 of CGST Act - Petitioner sought direction for video recording of investigation proceedings - Court directed that all future investigations be video recorded to ensure transparency and prevent coercion - Held that video recording safeguards rights of taxpayer and ensures fairness (Paras 21-25).
Issue of Consideration
Whether the amount of Rs.27,51,44,157/- collected from the petitioner during a GST investigation without any adjudication order was illegal and liable to be refunded, and whether the petitioner is entitled to mandamus for refund despite availability of alternative remedy.
Final Decision
The court allowed the writ petition and directed the respondents to refund the amount of Rs.27,51,44,157/- with interest at 6% per annum from the date of collection till the date of payment, within four weeks. The court also directed that all future investigations be video recorded.
Law Points
- Refund of tax collected without authority of law
- Coercive recovery without adjudication
- Self-ascertainment under Section 74(5) of CGST Act
- Right to dignity of taxpayer
- Video recording of investigation
- Alternative remedy not a bar when fundamental rights violated
