Section 54 of the CGST Act, 2017 – Refund-- Payments made during investigations —- The Appellant department filed appeal against order dated 14.09.2021 passed by the learned Single Judge, whereby the petition by the respondent has been disposed of with the directions to the appellants to consider the applications for refund and to pass suitable orders within a period of four weeks. The respondent operates an e-commerce platform under the brand name of 'Swiggy'. An investigation was initiated by the Department and it was alleged that the respondent availed ITC from the nonexistence company. The department conducted investigation from 28.11.2019 till 30.11.2019 and the respondent on 30.11.2019 deposited Rs. 15 Crores. Directors of the respondent were summoned and were threatened with arrest. The Company therefore made a further payment of Rs. 12,51,44,157/-. After a lapse of about 10 months of investigation, no SCN was issued, therefore, the respondent sought refund of the amount of Rs. 27,51,44,157/-. Thereafter, the respondent filed a writ for directions to the department for refund alongwith interest. The learned Single Judge held that payment of the amount made by the Company during the course of investigation was involuntary. The court observed that the Company deposited Rs. 27.51 Crores and requested the department to refund the amount. No rights have accrued to the department, as the claim for refund made by the company is well within time. Therefore there was no delay in filing writ petition. Further the supplier of the company is a nonexistent entity or not is pending under investigation. 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. The only provision which permits deposit of an amount during pendency of an investigation is Section 74(5) of Act, which is not attracted in this case. Therefore, amount has been collected from Company in violation of Article 265 and 300-A of the Constitution. The Department, therefore, is liable to refund the amount to the Company. They concur with the conclusion recorded by the learned Single Judge.

Held that:- The Hon’ble High Court did not find any merit in this appeal and dismissed the same.