No Interest is Payable on Refund of Amount Deposited During Search by Way of Adjustment of Credit Amount in ECL | HC
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Case Details: Sushil Kumar v. Delhi State GST Govt. NCT of Delhi - [2024] 163 taxmann.com 419 (Delhi)
Judiciary and Counsel Details
- Sanjeev Sachdeva & Ravinder Dudeja, JJ.
- A. Kumar & Pravesh B., Advs. for the Petitioner.
- Rajeev Aggarwal, ASC for the Respondent.
Facts of the Case
The petitioner was engaged in business of manufacturing and trading of ferrous and non-ferrous metals. It was subjected to search and during search operation, the amount towards alleged stock variation and alleged wrongful input tax credit was recovered without statutory demand. The petitioner filed writ petition and contended that deposit was involuntary and amount to be refunded with interest.
High Court Held
The Honorable High Court noted that the deposit was made at 3 AM during ongoing search operation and it could not be termed as voluntary. The Court also noted that as per Board instruction, no recovery can be made during search and requires deposit post search.
The Court further noted that no interest would be liable to be paid on the amount deposited by way of an adjustment of the credit amount standing in the Electronic Credit Ledger, unless an appropriate application had already been made, prior to the alleged non-voluntary deposit, claiming refund or as an adjustment towards tax due. Therefore, the Court held that deposit was involuntary and directed to refund amount towards alleged stock variation with interest and towards alleged wrongful input tax credit without interest.
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