Case Details: J. Ramesh Chand vs. Union of India (2025) 35 Centax 272 (Kar.)
Judiciary and Counsel Details
- S.R.Krishna Kumar, J.
- S/Shri Bharat Raichandani, Raghul Piranesh, Chandra Kiran & Vishwaranjan, Advs., for the Petitioner.
- Smt. Anuparna Bordoloi, S/Shri Jeevan Neeralagi & M.N. Kumar, Advs., for the Respondent.
Facts of the Case
The petitioner, a GST-registered trader engaged in the electronics and footwear business, filed regular returns and discharged due tax liabilities. Pursuant to a search and seizure operation at the petitioner’s residence, certain records and a laptop were seized, followed by inspection at the principal place of business the next day. During the said proceedings, the jurisdictional officers obtained multiple payments through Form GST DRC-03, even though, as on that date, no show cause notice had been issued under Section 74 of the CGST Act nor was any acknowledgment in Form GST DRC-04 furnished. The petitioner contended that the collection was involuntary, contrary to C.B.I. & C. Instruction No. 01/2022-23, and in violation of Articles 265 and 300-A of the Constitution of India, seeking quashing of the Form GST DRC-03 entries and refund of the recovered amount with interest. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that the payments made by the petitioner during search and seizure proceedings were not voluntary and did not qualify as self-ascertainment under Section 74(5) of the CGST Act. The Court observed that the absence of Form GST DRC-04 acknowledgement, the seizure of the laptop and records required for quantification, and the subsequent issuance of Form GST DRC-01A and show cause notice established that liability was determined only later. Relying on C.B.I. & C. Instruction No. 01/2022-23, the Court held that recovery during search was impermissible and that obtainment without lawful authority violated Articles 265 and 300-A of the Constitution of India. Accordingly, the recovery was declared illegal, and the respondents were directed to refund the amount with 6% interest in terms of Sections 50, 54 and 56 of the CGST Act and the corresponding provisions of the Karnataka GST Act and Rules.
List of Cases Cited
- Bhumi Associate v. Union of India — 2021 (46) G.S.T.L. 36 (Guj.) — Followed [Paras 7, 13, 26]
- Bundl Technologies Pvt. Ltd. v. UOI — W.P. No. 4467 of 2021, dated 14-9-2021 by Karnataka High Court — Followed [Para 7, 15, 26]
- Dabur India Ltd. v. State of U.P. — 1990 (49) E.L.T. 3 (S.C.) — Referred [Para 10]
- Intelligence Officer, Directorate General of GST Intelligence v. Kesar Color Chem Industries — (2025) 27 Centax 376 (Kar.) = 2025 (96) G.S.T.L. 138 (Kar.) — Referred [Para 19]
- Kesar Colour Chem Industries v. Intelligence Officer — (2024) 24 Centax 88 (Kar.) — Referred [Para 18]
- Lovelesh Singhal v. Commissioner, Delhi GST — (2023) 13 Centax 303 (Del.) = 2024 (82) G.S.T.L. 278 (Del.) — Referred [Para 7]
- Mahavir Singh v. Asstt. Commissioner — (2024) 19 Centax 355 (Del.) — Referred [Para 7]
- Modern Insecticides Ltd. v. Commissioner, Central GST — (2023) 9 Centax 292 (P&H.) = 2023 (78) G.S.T.L. 423 (P&H.) — Referred [Para 7]
- Parsvnath Traders v. Principal Commissioner, CGST — (2023) 9 Centax 203 (P&H.) = 2023 (77) G.S.T.L. 413 (P&H.) — Followed [Paras 7, 23, 26]
- Radhika Agarwal v. Union of India — (2025) 27 Centax 425 (S.C.) = 2025 (95) G.S.T.L. 225 (S.C.) = 2025 (392) E.L.T. 273 (S.C.) — Followed [Paras 12, 25, 26]
- Samyak Metals (P.) Ltd. v. Union of India — (2023) 7 Centax 121 (P&H.) = 2023 (74) G.S.T.L. 411 (P&H.) — Followed [Paras 7, 24, 26]
- Shree Ganesh Molasses Trading Co. v. Superintendent, Office of the Commissioner — (2023) 4 Centax 37 (Guj.) = 2023 (72) G.S.T.L. 190 (Guj.) — Referred [Para 7]
- Suretex Prophylactics (India) Private Limited v. Union of India — W.P. No. 2444 of 2022, dated 27-2-2023 by Karnataka High Court — Followed [Paras 17, 26]
- Union of India v. Bundl Technologies (P.) Ltd. — [2022] 136 taxmann.com 112 (Karnataka) = 2022 91 GST 709 (Karnataka) — Referred [Para 7]
- Vallabh Textiles v. Senior Intelligence Officer — (2022) 1 Centax 241 (Del.) = 2023 (70) G.S.T.L. 3 (Del.) — Followed [Paras 7, 20, 26]
List of Departmental Clarification Cited
- C.B.I. & C. Instruction No. 1/2022-23, dated 25-5-2022 [Paras 7, 14, 15]
