No GST Liabilities during Investigations until ascertained by

1. No GST Liabilities during Investigations until ascertained by GST authorities

3. No GST Liabilities until ascertained by GST authorities • The petitioner is engaged in manufacturing and trading of pulses, flour and dals. Investigation was conducted at the premises of the petitioner and the Respondent seized papers and documents in the course of investigation. • Further, Managing director of the petitioner signed an undertaking admitting short payment of GST and also agreed to pay such liability in decided 7 installments and balance amount after determination of GST liability by the respondent. As decided, the petitioner deposited the first installment on the date of investigation itself and also deposited the second installment after sometime. • Thereafter, the petitioner filed Writ petitioner before Hon’ble High Court contending that the petitioner forcefully made the payment of GST under influence of coercion, threat and stress.

4. Brief facts of the case • Shri NandhiDhall Mills India Pvt. Ltd. (“the Petitioner”) is a dealer in pulses, flour and dhals also manufactures food products, grain mill products and Dhal. • For trading purposes, the petitioner was using various trademarks. However, the petitioner voluntarily forgoes actionable claims or enforceable rights against marks. To this effect, the petitioner also filed an affidavit with Jurisdictional A.O. in terms of Schedule VI of CGST Act, 2017. • The petitioner is a Small Scale Industry registered under MSME Act and also registered under CGST Act 2017. • The investigation was conducted in the premises of the petitioner by the Director General of Goods and Service Tax (DGGST) (“The Respondent”) and various documents and records were seized during such proceedings. • During the course of proceedings, a statement was recorded from the managing director to the effect that the petitioner has not discharged its GST liability correctly and assured that the liability will be discharged as early as possible with applicable interest.

5. 2. Relevant Legal Extracts • Relevant extract of Section 74 of CGST Act is reiterated below: • “Section 74 of CGST Act – Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts.…. • (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. • (6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder • (7) Where the proper officer is of the opinion that the amount paid under subsection (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. ..”

6. Contention of the Petitioner • The petitioner made following submission to support his appeal • The petitioner has no liability for tax and it was forced to accept the liability of tax. • The investigation was on the festival of Deepawali and  investigation was carried out in an intrusive and acrimonious manner. • The petitioner relied on various legal precedents in support of its contention that any amount collected during investigation should be refunded if any final demand amount is not determined against the assessee