C.A.V. ORDER

(PER: HON'BLE MR JUSTICE S SUNIL DUTT YADAV)

The petitioner has called in question the correctness and legality of, Investigation carried out under Section 67 of the Central Goods and Services Tax Act, 2017 (for short ‘CGST Act’); the validity of the summons to the witness dated 31.07.2021; declaration that the recoveries to the tune of Rs.2.50 crores “extracted coercively” from the petitioner by the respondents on 31.07.2021 vide Payment Challan in Form GST PMT–06 Payment Challan; recovery at the office of respondent Nos.1 and 2 on 03.08.2021 while responding to the summons under Section 70 of the CGST Act as abuse of power declaring that the recovery of Rs.2.50 crores under Section 74(5) of CGST Act as being illegal; to quash the statements coercively taken by the respondents from the petitioner as being illegal; pending investigation direct that there should be no further recovery; direction to the respondents to furnish copies of the statements attributed to M/s Raj Chemicals; direction for investigation being carried out be transferred to Mumbai jurisdiction; and imposing of exemplary costs on respondent Nos.1 and 2 for causing mental agony.

2. Though the petitioner has sought for multiple reliefs, it is clear that they have confined their relief for refund of the amount of Rs.2.50 crores collected, while keeping open the other contentions in light of pending adjudication initiated by issuance of show cause notice.

3. The context in which proceedings were initiated by the respondents was that during investigation of M/s. Raj Chemicals, the statements of Sri Vijay Kumar Gupta one of the partners of M/s. Raj Chemicals, was stated to have been recorded under Section 70 of the CGST Act. It is stated that the said statement of Sri Vijay Kumar Gupta had referred to supplies made by M/s. Raj Chemicals to entities including that of the petitioner herein related to invoices raised without actual supply of any goods from M/s. Raj Chemicals. It was the further case of the respondents that an analysis of the e-way bills would reveal that the vehicles had not moved as evidenced by the RFID/fastag data. It is stated that based on the said admission in the statement of Sri Vijay Kumar Gupta as well as analysis of e-way bills, investigation was initiated. The show cause notice eventually came to be issued on 30.11.2022. It is further submitted that during the course of investigation prior to issuance of show cause notice, forcible recovery has been made and it was sought to pass it off as voluntary payments as per procedure prescribed. The details of payments made are as follows:-

“1. DRC No.DC2707210844665 dated 31.07.2021 for Rs.1,00,00,000/-.

2. DRC No.DC2708210031767 dated 03.08.2021 for Rs.1,50,00,000/-.”

4. It is the contention of the petitioner that the amounts were paid under duress and forcibly and the factual matrix and the manner of payment narrated by the petitioner in the list of dates and events produced before this Court is extracted hereinbelow:-

5. It is the further stand of learned counsel for the petitioner Ms.Nikita Badheka that they are cooperating in the investigation pursuant to the order of 30.09.2021 passed in the writ petition restraining the respondents from taking coercive steps compelling the petitioner to pay amounts during the course of investigation.

6. It is the stand of the petitioner that statements taken/recorded at 12.30 am on 31.07.2021 and during the summons proceedings at Bengaluru on 03.08.2021 has been retracted by the petitioner by filing affidavit dated 10.08.2021 (Annexure-H). It is further submitted that the writ petition was filed within one month thereafter to claim refund.

7. The legal contention raised on behalf of the petitioner is that the respondents do not have power to recover amounts during the pendency of investigation that has commenced even prior to issuance of show cause notice at the stage of Sections 67 and 70 and hence have sought for refund of amount paid.

8. It is the fur