Bombay High Court
Innovators Facade Systems Limited vs Assistant Additional ... on 5 March, 2024
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
Digitally signed
by PRASHANT
PRASHANT VILAS RANE
VILAS Date:
2024:BHC-OS:5196
RANE 2024.03.26
21:20:04
4- WPL-20383-23.DOC
+0530
PVR
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO.20383 OF 2023
Innovators Facade Systems Ltd. ... Petitioner
Versus
Assistant Additional Director General of GST ...Respondents
Investigation, Zonal Unit, Mumbai & Ors.
----
Mr. Rahul Thakar with Mr. Shrey Chakrabarty & Mr. Govind Javeri i/b.
Mr. Sushil Kumar, for Petitioner.
Mr. Jitendra B. Mishra with Mr. Satyaprakash Sharma, Mr. Rupesh Dube,
for the Respondents.
_______________________
CORAM: G. S. KULKARNI &
FIRDOSH P. POONIWALLA, JJ.
DATED: 5 March 2024
_______________________
Oral Judgment (Per G. S. Kulkarni, J.)
1. This petition under Article 226 of the Constitution of India prays for
the following reliefs:
"a) That this Hon'ble Court may be pleased to issue a Writ of
Certiorari or a writ in the nature of Quo Warranto or any other
appropriate writ, order or direction under Article 226 and 227 of the
Constitution of India directing Respondent Nos. 1 and 2 to refund
the amount of Rs. 2,50,00,000/- to the Petitioner Company along
with interest;
b) That this Hon'ble Court may be pleased to issue a Writ of
Certiorari or Mandamus or a writ in the nature of Que Warranto or
any other appropriate writ, order or direction under Article 226 and
227 of the Constitution of India declaring that the summons dated
12.10.2022 and 25.10.2022 issued to the MD of the Petitioner
Company as a routine basis as illegal and arbitrary:
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c) For cost of this petition and;
d) For such further and other reliefs as the nature and
circumstances of the case may require."
2. The case of the petitioner is that the petitioner was forced to deposit an
amount of Rs.2,50,00,000/- (Rupees Two Crores Fifty lakhs only) on 13
October 2022 that too at 3.30 a.m. It is petitioner's contention that the said
amount was recovered by the respondents from the petitioner by coercion,
hence, the petitioner is entitled to refund of the said amount, on the ground
that this would amount to collection/retention of the petitioner's amounts
without any authority in law.
3. We are quite convinced that in the facts of the present case, such relief
cannot be granted to the petitioner for more than one reason, which we
discuss hereunder.
4. At the outset, it needs to be noted that the petitioner is a legal person, it
is described to be a company registered under the Companies Act, 1956. As a
legal person, the petitioner certainly cannot be physically coerced. The
question is which of the representatives of the petitioner or its officers who
were incharge of the day to day affairs of the petitioner, whether were coerced
into such act. This is certainly a question of fact.
5. The petitioner has averred in the petition that search and seizure action
was resorted by the respondents at the petitioner's premises on 12 October
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2022. It commenced at 12.50 p.m. According to the petitioner, it continued
upto mid-night i.e. upto 3.30 a.m. when the petitioner was forced to deposit
the said amount. It is difficult to accept the case of the petitioner that there
was a coercion of the nature as alleged by the petitioner, as in our opinion,
such stance of the petitioner is also belied by the petitioner's own letter dated
13 October 2022 which reads thus:
"Date: 13.10.2022
To DGGI
Zonal Unit Mumbai.
Mumbai-400 021
GSTIN 27AAAC173260172
Subject: Submission of DRC-3 of Rs 2.50,00,000/-
Respected Sir,
Please find attached herewith DRC-03 of Rs 2,50,00,000/- vide ARN
AD2710220080370 Dt 13/10/2022. Balance Tax payment scheduled
will give after 10 days.
Thanking You
For, Innovators Façade Systems Limited
sd/-
(Authorised Signatory)
Encl:
DRC-03 of Rs 2,50,00,000/- vide ARN AD2710220080370 D1 13/10/2022"
(emphasis added)
6. It thus appears that not only the petitioner decided to voluntarily
deposit an amount of Rs.2,50,00,000/-, but also, agreed that the " balance tax
payment scheduled" would be made within 10 days. It also appears that the
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search and seizure operations revealed that an amount of more than Rs.5
crores was due and payable towards the outstanding tax which was very well
realized by the petitioner. Thus, the case of the petitioner in the present facts,
in regard to any coercion or allegation of any criminal act against the
respondent cannot be accepted, not only on account of the petitioner's letter
dated 13 October 2022, addressed by the petitioner to respondent No.1, but
also on the petitioner's own conduct which does not inspire any confidence
for the writ Court to accept such contention.
7. In our opinion, in reality or genuinely if the petitioner was to be
coerced, as a prudent legal person would resort, the petitioner could have
made complaints and/or representation on such actions of the officers, which
in law can certainly be regarded as highhanded and illegal. However, the
petitioner did not even whisper anything of such kind, in the several letters
addressed to the authorities including in answering the summons, to say that
such amount was recovered by the department under coercion, much less to
raise the same before the appropriate police authorities. Hence, a case of such
nature being directly made out in the writ petition de hors any material to that
effect would not give any impetus to the petitioner's case of any coercion by
the department. In this view of the matter, such factual dispute as to whether
any coercive methods were adopted by the respondents and that such amounts
were deposited under duress and coercion certainly cannot be conclusively
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ascertained and/or gone into in the proceedings of a writ petition under
Article 226 of the Constitution.
8. The Court cannot be oblivious that there are several cases where the
assessee is conscious and is aware that there are substantial taxes due and
payable by the assessee and/or there is substantial recovery from the assessee,
in such circumstances, like in the present case after search and seizure action
was initiated, to buy peace, the assessee may voluntarily deposit the amounts.
It is hence not unlikely that the assessee, to mitigate the circumstances and/or
avoid legal proceedings being initiated against it, voluntarily deposited the tax
amounts. Such position being taken by the assessee is not unknown to the tax
jurisprudence. Thus, any such amount voluntarily deposited, in such
circumstances, cannot be categorized as a deposit under coercion. In this
regard, there cannot be a straight jacket and/or a blanket opinion which could,
at all, be rendered by the Court as any action taken by the department is
required to be tested on its own facts.
9. In the present case, it appears that several summonses were issued to the
petitioner and that the investigation is in progress, it therefore, appears that
the show cause notice, is yet not issued. It is in these circumstances, the
petitioner by approaching this Court, for the first time, has made a grievance
of a coercive recovery, which in our opinion, cannot be accepted.
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10. Mr. Mishra, learned Counsel for the respondents would submit that a
show cause notice would be issued to the petitioner within four weeks from
today. We accept such statement. If that be so, we are of the opinion that,
keeping open all contentions of the parties, the prayers of the petitioner for
making claim of such amount should be left to be considered by the
appropriate Officer of the respondent as per law.
11. At this stage, nonetheless, learned Counsel for the petitioner submits
that similar issue was raised before the Madras High Court in the case Shri.
Nandhi Dhall Mills India (P) Ltd. Vs. Senior Intelligence Officer, Director
General of Goods & Service Tax, Trichy 1. We find that the Court in such
decision was not confronted with the facts as in the present proceedings and
more particularly, the assessee taking a position of addressing such letter
(dated 13 October 2022 (supra)), as addressed by the petitioner to the
respondents, which was never withdrawn. Our observations in regard to non-
applicability of the decision are fortified from reading of paragraph 27 of the
said decision. We thus find that such judgment is certainly not applicable in
the facts of the present proceedings.
12. Also the decision in "Shree Ganesh Molasses Trading Co. Vs.
Superintendent, Office of the Commissioner"2 would not be applicable in the
1 (2021)127 taxmann.com 31 (Madras)
2 (2023)148 taxmann.com 36 (Gujarat)
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present facts. This was a case where the petitioner had clearly contended that
he had not voluntarily reversed the credit, but it was coercively reversed by
respondent at 1.00 a.m. It is considering such facts the Court exercised its
discretion and going deep into the factual matrix and by extensively
appreciating the materials on record, including of statements of the concerned
persons as recorded during investigation, (as seen from paragraph 20 of the
judgment) the Court in the facts of the case, felt it appropriate to grant reliefs.
However, in the facts of the present case it is not possible for us to undertake
such exercise to appreciate the evidentiary value of any materials which may
form part of investigation, much less of any documentary and oral evidence so
as to record any finding of facts, more particularly, for the reasons which are
set out hereinabove.
13. We may also observe that when an assessee comes before the Court
invoking jurisdiction under Article 226 of the Constitution and that too
making a serious grievance that the department had coerced the assessee to
deposit the tax amounts, certainly as to whether it is genuinely a coercion or
whether it was a voluntary deposit, as seen in the present case, is purely a
disputed question of fact. Such question cannot be gone into and appreciated
in the proceedings under Article 226 of the Constitution. In fact, in such
circumstances, a tax already being deposited and a relief of refund thereof
being sought in considering grant of such relief in the proceedings under
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Article 226 of the Constitution and that too for refund of money, would
amount to the Court converting proceedings of a writ petition into
proceedings akin to a proceeding of a civil suit, as necessarily it would require
appreciation of evidence. Considering the settled principles of law as laid
down in catena of decisions, such exercise is not possible to be undertaken in
the summary, discretionary proceedings under Article 226 of the
Constitution, albeit in a given case, the Court may chose to exercise its
discretion, in the event, facts are absolutely glaring and gross that a reasonable
body of persons cannot resort to a highhanded and illegal action.
14. As a result of the above discussion, in our opinion, the petition is
thoroughly misconceived. It is accordingly, rejected. No costs.
(FIRDOSH P. POONIWALLA, J.) (G. S. KULKARNI , J.)
05 March, 2024
