Shri Nandhi Dhall Mills India Pvt. Ltd. vs. Senior Intelligence officer-
Court Rules in Favour of Shri Nandhi Dhall Mills: Refund of Payments Demanded During Investigation
In this case involving Shri Nandhi Dhall Mills India Pvt. Ltd. and the Revenue Department, the court was tasked with deciding whether the money taken from the company during an investigation should be returned. The question was whether the company’s admission of tax liability under pressure during the investigation should be considered valid.
The company, engaged in selling food products like pulses and flour, underwent an investigation by the Revenue Department on October 22, 2019. The investigation led to the seizure of various documents. During this process, the company admitted to miscalculating its tax liability and promised to correct it. Following a payment plan, the company paid Rs. 1 Crore initially and then another Rs. 1 Crore. However, the company’s Managing Director later retracted the admission, stating that it was made under coercion, stress, and without proper knowledge.
The main issue revolved around whether the company should receive a refund of the Rs. 2 Crore they paid to the Revenue Department. The company argued that the payments were not voluntary and that proper documentation confirming the payment reception was lacking. They also contended that the Revenue Department did not follow the appropriate procedure.
The court noted that the company’s payments were made through the prescribed process, but there was no proof provided by the Revenue Department regarding the receipt of the payments. Furthermore, the payments were made while the investigation was ongoing, which raised doubts about their voluntariness. The court also commented on the Revenue Department’s failure to follow the proper procedure, which cast doubt on the voluntary nature of the payments.
The court ruled in favor of the company, stating that the company’s payments during the investigation did not equate to a genuine acceptance of tax liability. It was emphasized that an admission made under stress or pressure should not be seen as self-assessment. The court also noted that the Revenue Department’s failure to follow the appropriate procedure indicated that the payments were not voluntary. As a result, the court ordered the Revenue Department to refund the Rs. 2 Crore to the company within four weeks.
In conclusion, the court decided that the money paid by the company during the investigation was not a valid acknowledgment of tax liability, as it was made under duress. The court highlighted that merely signing a statement under pressure and making payments does not constitute a voluntary acceptance of tax liability. The court’s judgment directed the Revenue Department to return the Rs. 2 Crore to the company within a specified timeframe.