TMI BlogA Case of Coerced Input Tax Credit Reversal - GST recovery during search and seizure proceedings.X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Delhi Goods and Services Tax and others, seeking a refund of ₹18,72,000, alleging it was coercively deposited during an inspection. The case also questioned the legality of the search and seizure conducted at the petitioner's premises. Business Profile The appellant, is engaged in the trading of PVC Resin and is registered under the Central Goods and Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 74 of the CGST Act. Petitioner's Allegations : The petitioner contested the proceedings under Section 67 of the CGST Act, arguing that the authorization for the search was vague and imprecise, and that the officers had no concrete reason to believe any wrongdoing. He also contended that the collection of ₹18,72,000 by compelling the transfer from his Ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the issuance of a show cause notice to avoid penalties. These provisions, however, do not empower the Department to compel tax payments. Guidelines Against Coercive Tax Collection : Citing the Gujarat High Court's directives in Bhumi Associate v. Union of India, the court emphasized guidelines that prohibit recovery of tax during search/inspection proceedings and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icity in Search Operations : The requirement for clear and specific reasons in authorizing search and inspection under GST law. Coercion and Voluntary Tax Payments : The judgment underscores the illegality of coercive tax collection during search operations and reaffirms the voluntary nature of tax payments before the issuance of show cause notices. Protection of Taxpayer Rights : The deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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