IMPORTANT CASE LAWS
Goods and Services Tax
(a) The Petitioner is registered and operates an e-commerce platform under the name of 'Swiggy'. The Petitioner hires third party service providers during holidays/festive season owing to spike in food orders. The third-party service providers charge consideration for delivery and supply of food along with GST and accordingly, the Petitioner avails input tax credit (ITC) on GST paid on invoices raised by such third party service providers.
Department initiated investigation and alleged that ITC availed by the Petitioner on invoices raised by one of the service providers, Greenfitch was fraudulent on the basis that third party service provider is non-existent/fictitious entity. The Petitioner deposited Tax amounting to INR 27,51,44,157/- vide DRC-03's upon directions of the department.
Thereafter, the Petitioner filed Writ Petition (WP) seeking directions for department for refund of INR 27,51,44,157/- which was paid by the Petitioner to avoid coercive action during pendency of ongoing investigation.
The Single bench of Hon'ble High Court held that payment of amount during investigation was involuntary. However, it has been held that consideration of right to seek refund of amount deposited by the Petitioner is independent of process of investigation and two cannot be linked together. Being aggrieved by the order of single bench of the Hon'ble High court, the department filed appeal before the division bench of Hon'ble High Court.
The division bench of Hon'ble High Court held that payments made by the Petitioner cannot be termed as 'admitting liability'. Further, it has been held that the department is required to exercise powers with reasonable manner which should not instil fear in minds of taxpayer. Therefore, amount collected by department was against author of law and hence, eligible for refund of the payments made to the department.
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