Order Date: 18 January 2023

Parties: M/S SHREE GANESH MOLASSES TRADING CO. vs. SUPERINTENDENT, OFFICE OF THE COMMISSIONER

Facts – 

• The Petitioner, M/S SHREE GANESH MOLASSES TRADING CO. is engaged in the business of trading industrial chemicals, soda ash, silica bicarbonates, etc. A search and seizure operation was carried out by the team of CGST officials and ITC of GST & CGST lying in the electronic credit ledger to the tune of Rs.18,84,150/- and Rs.18,84,150/- was reversed corrosively and illegally filed Form DRC-03 during midnight.
• The Petitioner is of the view that no assessment has been framed so far nor any demand has been raised in absence of any assessment, the quantum of demand cannot be determined hence, the action of coercive recovery to the tune of Rs. 37,68,300/- by reversing the ITC in electronic credit ledger is bad in law.
• The Petitioner pleased the court to quash and set aside Form DRC-03 and to direct the respondent authorities to refund the amount of Rs.37,68,300/- recovered by reversing the Input Tax Credit.

Issue – 

• Whether the petitioner should get the refund?

Orders – 

• The Court stated that the facility of filing a complaint/ grievance after the end of search proceedings should be made available to the assessee if he was forced to make payment in any mode during the pendency of the search proceedings, then strict disciplinary action should be initiated against the concerned officer.
• The Court stated that if the assessee comes forward to make voluntary payment by filing Form DRC-03, the assessee should be asked/advised to file such Form DRC-03 on the next day after the end of the search proceedings.
• The Court noticed that the action of the petitioner which is termed to be voluntary and did not have any element of voluntariness. Resultantly, the Court ordered the respondent to reverse the ITC to the tune of Rs. 37,68,300/- along with 6% interest. Accordingly, this petition stands disposed of.