HC Directed Department to Refund the Amount Collected During Search Without Authority of Law

Case Details: William E Connor Associates & Sourcing (P.) Ltd. v. Union of India - [2023] 152 taxmann.com 174 (Punjab & Haryana)

Judiciary and Counsel Details

• • Ritu Bahri & Mrs Manisha Batra, JJ.
  • B.L. Narsimhan, Amrinder Singh & Ms Shreya Khunteta for the Appellant.
  • Sourabh Goel, Tej Bahadur & Ms Shivani Sahni, Advs. for the Respondent.

Facts of the Case

The petitioner was engaged in export of Business Support Services to one recipient in Hong Kong. It applied for refund of accumulated input tax credit which was granted by authorities. Thereafter, a search was conducted in premises of petitioner and it deposited a certain amount under protest on assurance that it would be reverted in input tax credit of company.

The petitioner requested GST to reinstate impugned amount and but the same was not accepted. It filed writ petition requeauthorities sting refund of the amount deposited during search.

High Court Held

The Honorable High Court noted that no proceedings under Section 74(1) of the CGST Act had been initiated by the revenue even though a period of two years has lapsed. It was well settled law that an amount collected by authority during search without authority of law would amount to depriving a person of his property without any authority of law and which would infringe his rights under Article 300A of Constitution of India.

Since, the department did not place any evidence explaining that the impugned amount was collected as per authority of law, therefore, the petition was allowed by the Court and the department was directed to refund collected amount.