Umamageswari Maruthappan
The Gujarat High Court has suggested some guidelines to ensure proper and standard procedure of search operations by the GST Officials.
The Bench comprising Justices J B Pardiwala and I J Vora directed the Central Board of Indirect Taxes and Customs (CBIC) and the Chief Commissioner of Central or State tax, Gujarat to issue necessary guidelines to the GST Officials, preventing them from the coercive recovery of dues while in search operations even if the concerned person gives it willfully.
The Court ordered a stay to this practice and proposed to pass an interim order to issue guidelines in this regard. It also gave the following four suggestions after consulting lawyers and advocates:
1) “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.
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) Provide facility of filing complaint at the end of search proceedings, if the assessee was forced to make payment in any mode during the pendency of the search proceedings.
4) If a complaint is filed and found correct, strict disciplinary action should be initiated against the concerned officer.”
The matter will now be heard on 18th February 2021.
The present set of guidelines of the Gujarat High Court came into light following several complaints regarding forceful recovery of dues from the GST Officials during search proceedings.
The High Court Bench had also criticised the 33-hour-long detention of Kanubhai Patel, the proprietor of Bharat Acid and Chemicals (Vapi) and for recovering from him Rs. 9 Crore.
Following the incident’s disclosure, several other leading businesses and even some court practitioners publicized their allegations on coercive recovery during search operations.
