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“Voluntary” recovery of tax during search/investigation Whether valid?

  • In view of various writ petitions filed before Hon’ble High Courts against alleged voluntary deposit of tax dues during search/investigation proceedings, Instructions have been issued by CBIC.

  • It has clarified that in line with the provisions of Section 79 of the CGST Act 2017, recovery of taxes may only be made after issuance an adjudication order.

  • It is clarified that there may not be any circumstances necessitating 'recovery' of tax dues during the course of a search, inspection, or investigation proceedings.

  • It is also provided that if a taxpayer complains about a tax officer using force or coercion to get tax deposited during a search, inspection, or investigation, the matter may be enquired at the earliest and in case of any wrongdoing on the part of any tax officer, strict disciplinary action as per law may be taken against the defaulting officers.

Instruction No. 1/2022-2023 [GST – Investigation]

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