The Gujarat High Court ruled that no recovery on the spot during search proceedings in GST cases.
The division bench of Justices J.B. Pardiwala and Ilesh J.Vora proposed to pass an interim order issuing the directions to the Central Board of Indirect Taxes and Customs as well as the Chief Commissioner of Central or State Tax of the State of Gujarat to issue the various guidelines by way of suitable circular/instructions.
Firstly, no recovery in any mode by cheque, cash, e-payment, or adjustment of input tax credit should be made at the time of search/inspection proceedings under Section 67 of the Central/Gujarat Goods and Services Tax Act, 2017 under any circumstances.
Secondly, 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.
Thirdly, 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.
Lastly, if a 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 court listed the matter on February 18, 2021 for the next hearing.
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