No GST to be paid during Search & Seizure unless accepted as GST liability

Last updated: 17 April 2021

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The Madras High Court has ruled that payments made under the stress of an investigation, even if recorded as an admission of GST liability, do not constitute a valid self-assessment. The court ordered the Revenue Department to refund ₹2 crore collected from Shri Nandhi Dhall Mills India Pvt. Ltd. because the company later retracted its statement, asserting it was made under coercion and without proper calculation. The court clarified that for a payment to close proceedings under Section 74(5) of the CGST Act, it must be a genuine, unconditional self-ascertainment, not one made under duress.

Court :
Madras High Court

Brief :
The Hon'ble Madras High Court in Shri Nandhi Dhall Mills India Pvt. Ltd. v. Senior Intelligence Officer, DGGST &Ors. [W.P. No. 5192 of 2020 and WMP. No. 6135 of 2020] directed the Revenue Department to refund the amount of INR 2 crore collected from the assessee during the investigation. Held that, merely because the assessee had signed a statement admitting tax liability under the stress of investigation and had also made a few payments as per the statement, cannot lead to self-assessment or self-ascertainment.

Citation :
W.P. No. 5192 of 2020 and WMP. No. 6135 of 2020

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