The Division Bench of Justice Alok Aradhe and Justice MGS Kamal dismissed an appeal filed by the Central government against a decision of the single-judge directing them to consider refunding GST tax which had illegally been collected from Swiggy.
While dismissing the appeal, the Court modified the order of the single-judge and specifically directed the government to refund the amount.
“Article 265 of the Constitution mandates that collection of tax has to be by the authority of law. If tax is collected without any authority of law, the same would amount to depriving a person of his property without any authority of law and would infringe his right under Article 300A of the Constitution of India as well.
In the instant case, the only provision which permits deposit of an amount during pendency of an investigation is section 74(5) of CGST Act, which is not attracted in the fact situation of the case. Therefore, it is evident that amount has been collected from Company in violation of Article 265 and 300-A of the Constitution.
Therefore, the contention of the Department that amount under deposit be made subject to the outcome of the pending investigation can not be accepted. The Department, therefore, is liable to refund the amount to the Company,” the judgment said.
Source: Barandbench
