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Gujarat High court directed CBIC to issue circular for tax recovery process during search proceedings in GST, while hearing several cases involving serious allegations against GST officers.

Dr. Satish Dhavale (Additional Director General, Surat) assured court that there shall not be any further complaint against the officers of the department of undue harassment, threat, pressure, etc. Court also directed the petitioners to make CBIC, a respondent party, in all writ applications.

Below are the date-wise case developments.  

05th Feb 2021

Notice issued to GST Officers by Gujarat High Court on serious allegation by taxpayer for being interrogated for 33 hours and coerced to pax Rs. 9 crore tax.  No wonder, the State of Gujarat has topped the list of States with the highest collection of tax under the GST Act in the country for the year 2020-21: High Court said

The case was filed by Sh. Kanubhai Manilal Patel prop. of M/s Bharat Acid and Chemicals putting serious allegations on the GST Officers to coerce and pressurize him to transfer Rs.9 crore to the account of GST department. 
High court said that the facts of this case are very gross and shocking. Serious allegations have been levelled against the respondents Nos.2 and 3 respectively. The matter needs to be looked into urgently.
"The mode and manner in which the respondents Nos.2 and 3 are alleged to have coerced and pressurized the writ applicant to transfer an amount of almost Rs.9 Crore to the account of the department is shocking. It is brought to our notice that the writ applicant was summoned and under the guise of interrogation was kept under detention for almost a period of 33 hours. No wonder, the State of Gujarat has topped the list of States with the highest collection of tax under the GST Act in the country for the year 2020-21."
Let Notice be issued to the respondents, returnable on 16th February 2021. By the next date of hearing, we direct the respondents, more particularly, the respondents Nos.2 and 3 to file their respective reply so that this Court is able to proceed further with the matter expeditiously.
Next hearing On 16th Feb 2021.

16th Feb 2021
The officers of the concerned department who were asked to join the video conference did join, but at a very later stage. They were unable to witness the discussion that took place between the Court and Mr. Vyas. We propose to pass an interim order issuing the following directions.
The Central Board of Indirect Taxes and Customs as well as the Chief Commissioner of Central/ State Tax of the State of Gujarat are hereby directed to issue the following guidelines by way of suitable circular/instructions: 
(1) No recovery in any mode by cheque, cash, epayment 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.
(2) 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.
(3) 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.
(4) If complaint / grievance is filed by assessee and officer is found to have acted in defiance of the afore-stated directions, then strict disciplinary action should be initiated against the concerned officer.
Next hearing On 18th Feb 2021.

18th Feb 2021

Pursuant to the our order dated 16th February 2021, the officers of the DGGI, Surat namely, (1) Dr. Satish Dhavale, (2) Shri Pramod Kumar, (3) Shri BBL Verma, (4) Shri Yogin B. Vyas, (5) Shri Ajay Kumar Tomar, (6) Shri R.K. Mishra, (7) Shri Yogesh Shaw, (8) Shri Kishore Upadhyay, (9) Shri B.S. Rathod, and (10) Shri Abhinav Chaowdhary, have joined the video conference.
Mr. Devang Vyas, the learned Additional Solicitor General of India, submitted that as this Court is inclined to issue few directions as noted in the order dated 16th February 2021, such directions will have to be issued to the Central Board of Indirect Taxes and Customs [CBIC]. It is pointed out by Mr. Vyas that the CBIC is not a party respondent in any of the writ applications and he will have to discuss the issue with the CBIC.
In view of the above, all the learned counsel appearing in respective writ applications shall implead the CBIC as the party respondent in their respective writ applications. The cause title be amended accordingly. Mr. Devang Vyas, the learned Additional Solicitor General of India, waives service of notice for and on behalf of the CBIC. 
Mr. Vyas shall discuss the matter seriously with the highest authority of the CBIC. We put the CBIC to notice as to why the guidelines as stated in the order dated 16th February 2021 should not be issued by way of Circular/ Instructions. We have been assured by Dr. Satish Dhavale that there shall not be any further complaint against the officers of the department of undue harassment, threat, pressure, etc. Dr. Dhavale has assured that the inquiry or investigation that may be undertaken shall be in accordance with law.
Next hearing On 23rd Feb 2021.
Order dated 05.02.2021
Order dated 16.02.2021
Order dated 18.02.2021

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Feb 19, 2021


This is really shocking. Must be investigated.
By: Kamal Kant | Dt: Feb 7, 2021
Provisions under GST on search and seizure were to be relooked. Authorities have been given fabulous powers which will in turn definately effect growth of profitable business which may be tiny or big in size. The powers given under the act wii stop very existence of business
By: Anantharaman | Dt: Feb 9, 2021
By: Virendra | Dt: Feb 20, 2021

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