SGST High Court Cases

GST - Section 78 of CGST/BGST Act, 2017 - Initiation of recovery proceedings - Validity of recovery of total demand due as per the assessment order, from the bank accounts of the assessee without giving proper intimation or time specified for the assessee to satisfy the demands – HELD - Section 78 provides that a person against whom an order is passed shall satisfy the amounts payable within a period of three months and the proviso empowers the Assessing Officer to seek satisfaction of such dues even during a period lesser than three months. Hence, when reasons are recorded in writing, there is a duty on the Assessing Officer to specify the time within which the amounts are to be paid which intimation has to go to the assessee – the Assessing Authority in the scheme of the enactment could not have made recovery of the entire amount. Section 112 provides for twenty per cent of the tax amount due, in addition to the ten per cent amount paid at the first appellate stage, for maintaining a second appeal before the Appellate Tribunal. On such payment being made under Section 112(8), there is also a requirement that the further recovery proceedings would be stayed. Hence, when an Appellate Authority was not constituted even when the Assessing Officer acted under the proviso to Section 78 what could have been recovered is only twenty per cent of the tax amount due in addition to that paid up to institute a first appeal - The State and its revenues would not collapse if the said amounts were not recovered but there is every chance of a business folding up without liquid funds being available to it, especially a running concern with liabilities to its employees, its other creditors and so on and so forth - The actions of the Tax Authorities, under the taxing statute should be tempered with good conscience and judicious reasoning, which in the instant case was in complete derogation of the established principles of rule of law; reigning supreme even when there is a compulsory extraction of money for the larger good and welfare, which a levy of tax always is - The tax authority should also act as a facilitator of business and economy and not merely as an extortionist, always looking to have the pound of flesh, to satisfy his hierarchical superiors to push his/her personal agenda - what was required to be paid by the assessee, for maintaining an appeal before the Appellate Tribunal, if constituted, was twenty per cent of the tax dues. Hence, the balance amounts from the total sums forfeited shall be paid over to the assessee - the officer who issued impugned order, who acted in complete derogation of the statutory provisions and established principles of law, should pay an amount of Rs. 5,000/- as cost to the assessee – the writ petition is allowed

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