No Recovery Should Be Made At The Time Of Search/Inspection Under Any Circumstances: Gujarat High Court Directs GST Officials

The Bench of Justice J. B. Pardiwala and Justice I. J. Vora issued this interim direction following various complaints of coercive recovery by GST officials during the search operations.

Other directions issued by the Court

Since the officers of the afore-mentioned departments who were asked to join the video conference did join, but at a very later stage, they were unable to witness the discussion that took place between the Court and Devang Vyas (Additional Solicitor General of India), the Court passed an interim order issuing the following directions: -

• Even if the assessee comes forward to make voluntary payment by filing Form DRC­03, the assessee should be asked/ advised to file such Form DRC­03 on the next day after the end of search proceedings and after the officers of the visiting team have left the premises of the assessee.
• The facility of filing complaint/ grievance after the end of search proceedings should be made available to the assessee if the assessee was forced to make payment in any mode during the pendency of the search proceedings.
• If complaint/ grievance is filed by assessee and the officer is found to have acted in defiance of the afore­stated directions, then strict disciplinary action should be initiated against the concerned officer.

The matter has now been posted for further hearing on Thursday (18th February).

During the course of previous hearing in this matter, while noting that "the facts of the case are very gross and shocking", the Gujarat High Court on Friday (05th February) had pulled up the GST officials for allegedly "coercing and pressurizing" a person to transfer an amount of almost Rs.9 Crore to the account of the department.

The Bench of Justice J. B. Pardiwala and Justice Ilesh J. Vora had termed the alleged coercive recovery tactics as "Shocking" while hearing the plea of one Kanubhai Manilal (Proprietor, Bharat Acid And Chemicals) who alleged before the Court that he was summoned and under the guise of interrogation, he was kept under detention for almost a period of 33 hours.

Importantly, the Court had also invited the attention of the respondents to the detailed order in the case of Paresh Nathalal Chauhan vs. State of Gujarat in (2020) 79 GST 105.

This case deals with search and seizure operations conducted by GST officials. In this matter, the Court had held that the act of GST officers to stay at taxpayer's House for 8 days was illegal.

Case title - M/S Bharat Acid And Chemicals, Proprietor Kanubhai Manilal Patel v. Union Of India [Special Civil Application No. 2426 of 2021]

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