NEW DELHI: The Delhi High Court on Thursday asked the central excise authority to refund the service tax amounts paid by three travel portals on the grounds that the money was deposited under “coercion” through the “unwarranted” arrest of some of their officials.

The direction was given by a Bench of Justices S. Muralidhar and Vibhu Bakhru, which made it clear that if the amount was not refunded to MakeMyTrip, Ibibo and eBIZ within four weeks, then it would make the Director General of Central Excise Intelligence (DGCEI) liable to pay simple interest at six per cent per annum on it.

The court also directed the DGCEI to pay Rs. 1 lakh to each of the companies within four weeks. “The court is unable to accept that the payment by the petitioners of alleged service tax arrears was voluntary. The payment of Rs. 17 crore by eBIZ was under coercion. Consequently, the amount that was paid by the petitioners as a result of a search on their premises by the DGCEI, without an adjudication, much less a show-cause notice, is required to be returned to them forthwith,” the Bench said. ‘Method impermissible’ It also said that in the case of MakeMyTrip (MMT) and eBIZ, “the resort to the extreme coercive measure of arrest followed by the detention” of M. K. Pallai, Vice-President (Finance) of MMT, and Pawan Malhan, Managing Director of eBIZ, “was impermissible in law” and “totally unwarranted”. It told the DGCEI that it had to use the power of arrest “with great circumspection and not casually” to induce fear into an assessee.-PTI