Wednesday, February 17, 2021

No Recovery Should Be Made At The Time Of Search/Inspection Under Any Circumstances: Gujarat High Court Directs GST Officials

In a crucial order, the Gujarat High Court on Tuesday (16th February) directed the Central Board of Indirect Taxes and Customs as well as the Chief Commissioner of Central/State Tax of the State of Gujarat, inter alia, to make no recovery in any mode at the time of search/inspection proceedings under Section 67 of the Central/Gujarat Goods and Services Tax Act, 2017 under any circumstances.

The Bench of Justice J. B. Pardiwala and Justice I. J. Vora issued this interim direction following various complaints of coercive recovery by GST officials during the search operations.

Since the officers of the afore-mentioned departments who were asked to join the video conference did join, but at a very later stage, they were unable to witness the discussion that took place between the Court and Devang Vyas (Additional Solicitor General of India), the Court passed an interim order issuing the following directions: -

  • Even if the assessee comes forward to make voluntary payment by filing Form DRC­03, the assessee should be asked/ advised to file such Form DRC­03 on the next day after the end of search proceedings and after the officers of the visiting team have left the premises of the assessee
  • The facility of filing complaint/ grievance after the end of search proceedings should be made available to the assessee if the assessee was forced to make payment in any mode during the pendency of the search proceedings. 
  • If complaint/ grievance is filed by assessee and the officer is found to have acted in defiance of the afore­stated directions, then  strict disciplinary action should be initiated against the concerned officer.

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