GST Officer forced the Director of petitioner companies to withdraw the money from his personal bank account and deposit it for the company’s credit

The Delhi High Court directed the company to apply for a refund after a Goods and Service Tax ( GST ) officer coerced its directors to deposit ₹22 lakhs from their personal accounts into the company’s credit, noting that the deposit challan explicitly stated the amount was deposited under protest and in the presence of the GST officer. The  issue to be decided was whether the petitioners are entitled to the refund of Rs.22,00,000/- which, the petitioners claim, they were compelled to deposit during the course of the search and seizure raid. Get a Copy of GST Ready Reckoner, Click here Mrs. Beenashaw Soni, representing the petitioners, referenced decisions from this court in cases W.P.(C) 7860/2022 M/s Uflix Industries v. The Additional Director General, Directorate of Revenue Intelligence & Ors and W.P.(C) 9834/2022 Vallabh Textiles v. Senior Intelligence Officer Both cases, decided in 2023 and 2022 respectively, support the contention that amounts deposited under similar circumstances should be refunded to the petitioners. The core issue was whether the ₹22,00,000/- was deposited under compulsion. The petitioners’ counsel argued that the deposit challan explicitly states that the amount was deposited under protest and in the presence of a Goods and Services Tax ( GST ) Officer. It was claimed that the GST Officer forced the Director of petitioner companies ( petitioner no.3, Mr. Rakesh Gupta ) to withdraw the money from his personal bank account and deposit it for the company’s credit. Get a Copy of GST Ready Reckoner, Click here Mr. Ojha, representing the respondents, countered that the officer’s involvement was necessary to facilitate Mr. Gupta’s withdrawal of funds due to the attachment of the directors’ bank accounts. He also emphasized that the deposit was made after Mr. Gupta’s statement was recorded, not during the search and seizure operation. The bench, comprising Justice Vibhu Bhakru and Justice Sachin Datta, refrained from issuing any direct orders for a refund in these proceedings. However, the court clarified that the petitioners are entitled to apply for a refund according to the law, without waiting for the adjudication of the show Cause Notice. Accordingly, the writ petition was disposed of