Section 74 of the CGST Act, 2017 – Deposits made during investigation –-–-The appellant department filed appeal aggrieved by the order dated 07.04.2021, whereby, the learned Judge directed the appellants to refund the sum of Rs. 2 crores, within a period of four weeks. The first respondent/writ petitioner submitted that after a search was carried out, they paid the entire tax due in instalments under coercion, threat and duress and that the inspection team have subjected the employees of the writ petitioner/first respondent to sheer harassment to collect the tax due. The learned Judge, upon appraisal of the facts, placed reliance on the interim order passed by the Division Bench of the Gujarat High Court in the case of M/s. Bhumi Associate vs. Union of India, wherein it was specifically directed that no recovery in any mode, by cheque, cash, epayment or adjustment of Input Tax Credit should be made at the time of search/ inspection even if the assessee voluntarily comes forward to make payment. The court observed that both the counsels in unison admitted that an enquiry has to be conducted and the actual tax liability of the writ petitioner/first respondent, if any, has to be determined in the light of the available materials and prayed that the appellants may be directed to conduct an enquiry, determine the tax liability of the writ petitioner/first respondent and thereafter to proceed in accordance with law.

Held that:- The Hon’ble High Court directed the appellants to issue a show cause notice calling upon the writ petitioner/first respondent to produce documents to prove that they are not liable to pay any tax under the Act or they have paid the entire tax due to the department, within a period of four weeks. On receipt of such notice, the writ petitioner/first respondent shall submit their objections, if any, along with documentary evidence. Thereafter, the appellants are directed to afford an opportunity of personal hearing and shall pass appropriate orders on merits, within four weeks.