Amount recovered during the investigation is to be treated as amount paid under protest which is liable to refund in case where there are no proceedings initiated.

Case Details:

Issue- In the above case, the petitioner has filed this Writ Petition seeking for a Mandamus to direct the respondent to pay a sum of Rs. 17,27,790/- and Rs. 12,60,472/-which was paid by the petitioner during the course when the officers of the respondent visited the premises of the petitioner and investigated regarding the alleged wrong availment of Input Tax Credit and such amount to be refund back to the petitioner.

Held- It was held that the amount paid by the petitioner are only deposits pending proper adjudication under section 73/74 of the CGST Act, 2017 and the amounts were collected from the petitioner during March 2021, at the time when summons were also issued to the petitioner, Mahazar was drawn and seizure memo was also issued to the petitioner on the same date. The petitioner also appears to have sent a representation on 1-4-2021. There is no merits in this Writ Petition at this stage. The amount paid by the petitioner shall be treated as amount paid by the petitioner “under protest” and will be subject to the final appropriation in the proceedings to be initiated under section 73/74 of CGST Act, 2017. The respondents perhaps are investigating and therefore, seized the documents from the petitioner. Considering the same, I am inclined to dispose the Writ Petition by directing the respondent or the proper officers concerned to complete the investigation and proceed to issue appropriate show cause notice to the petitioner within a period of six months from the date of receipt of a copy of this order. The respondent is also directed to return the photo copies of the seized documents to the petitioner, if they have not been already returned to the petitioner. In any event, in the show cause notice under section 73/74 of CGST Act, 2017, the respondent shall clearly spell out the reasons and give details of the Relied Upon Documents based on which the demand is proposed to be made against the petitioner and why the amount already paid by the petitioner should not be appropriated. The entire exercise may be completed by the respondent preferrably within a period of twelve months from the date of receipt of a copy of this order, i.e., show cause notice should be issued within six months from the date of receipt of a copy of this order together with all Relied Upon Documents. The respondent shall also return the originals of all the documents which are not required for the investigation. The petitioner shall cooperate with the respondent and file a reply within a period of thirty days from the date of issuance of show cause notice. The respondent shall pass appropriate orders within a period of twelve months as stipulated above. In case, there is no case made out in the show cause proceedings, the respondent shall refund the amount to the petitioner, in accordance with law.