The Punjab and Haryana High Court in the case Diwakar Enterprises Pvt. Ltd. Versus Commissioner of CGST Citation observed and has held that if the tax is being collected without any authority of law, the same would be amounting to deprive the person of his property without any authority of law and it would infringe the right of him as stated under Article 300 A of the Constitution of India.
The bench comprising of Justice Ritu Bahri and Justice Manisha Batra in the case observed and has stated that no tax receipt was to be given by the proper officer after the said amount is accepted. Thus, the amount which is to be deposited by the petitioner under protest was liable to be refunded as the petitioner in the case was being deprived of his right.
In the present case, the petitioner or assessee is engaged in the manufacturing lead and lead-related products. Thus, the department or respondents block the input tax credits wherein which amounts to Rs. 24,18,516 lying in the electronic ledger of the petitioner, to which the petitioner filed his objections.
Further, the department or respondents searched the premises of the petitioner, and the director in the case was also being questioned throughout the search. Therefore, the director was forcibly taken to their office, where the petitioner was detained for two days. The petitioner was also pressured to deposit the amount, and due to this, the petitioner deposited an amount of Rs. 1,99,90,000.
However, the petitioner in the case lodged a protest with regards to the deposit. Thus, the department also searched the petitioner premises and got another an amount of Rs. 25 lakhs forcibly from the petitioner.
It has also been contended by the department that the petitioner voluntarily deposited the amount and the same is clear.
The court while considering the facts and circumstances of the case observed and did not accept the contention of the department that the amount under deposit be made subject to the outcome of the pending investigation. The court found that the only provision that permits for depositing of an amount during the pendency of an investigation is as per Section 74(5) of the Act, the same is not attracted. Therefore, the amount which is to be collected from the company is in violation of Article 265 and Article 300A of the Constitution of India.
Accordingly, the court directed the department to refund a sum for an amount of Rs. 1,99,90,000 along with 6% interest.
