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2023 (4) TMI 207 - HC - GSTRefund alongwith Interest - amount deposited during search proceedings - blocking of Input Tax Credit - whether the amount deposited on behalf of the petitioner-concern, during search proceedings carried out, was a voluntary act or not? - HELD THAT:- Reference at this stage can further be made to judgment of Karanataka High Court in a case of THE UNION OF INDIA REP. BY THE SECRETARY DEPARTMENT OF REVENUE MINISTRY OF FINANCE, DIRECTORATE GENERAL OF GOODS AND SERVICES TAX INTELLIGENCE NEW DELHI, SENIOR INTELLIGENCE OFFICER DIRECTORATE GENERAL OF GOODS AND SERVICES TAX INTELLIGENCE HYDERABAD ZONAL UNIT, DEPUTY DIRECTOR DIRECTORATE GENERAL OF GOODS AND SERVICES TAX INTELLIGENCE HYDERABAD, ADDITIONAL DIRECTOR DIRECTORATE GENERAL OF GOODS AND SERVICES TAX INTELLIGENCE HYDERABAD PRINCIPAL ADDITIONAL DIRECTORATE GENERAL DIRECTORATE GENERAL OF GOODS AND SERVICES TAX INTELLIGENCE HYDERABAD VERSUS M/S. BUNDL TECHNOLOGIES PRIVATE LIMITED, THE STATE OF KARNATAKA, COMMISSIONER OF STATE TAX GOODS AND SERVICE TAX BENGALURU [2022 (3) TMI 625 - KARNATAKA HIGH COURT], wherein the question was that whether the amount was voluntarily paid during investigation by a company under Section 74 (5) of Act. The appeal was dismissed and it was held that Article 264 of the Constitution of India mandates that collection of tax has to be by authority of law. If tax is collection without any authority of law, the same would amount to depriving person of his property without any authority of law and would infringe his right under Article 300A of Constitution. The only provision which permits deposit of amount during pendency of investigation is Section 74 (5) of Act, which is not attracted. The amount collected from company is in violation of Article 265 and 300A of Constitution. The contention of the department that amount under deposit be made subject to outcome of pending investigation, cannot be accepted. In the present case, as per the department, the petitioner has deposited the impugned amount voluntarily and the proper procedure has been followed. But Article 265 of the Constitution of India lays down that collection of tax has to be by the authority of law. If tax is collected without any authority of law, the same would amount to depriving a person of his property without any authority of law and would infringe his right under Article 300 A of the Constitution of India as well. In the present case, no receipt was given by the Proper Officer after accepting the impugned amount - Thus, the amount deposited by the petitioner under protest were liable to be refunded, as the petitioner has been deprived of his right. The writ petition is partly allowed and respondent No. 1 is directed to refund a sum of Rs.1,99,90,000/- along with 6 % interest.
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