2018 (11) TMI 276 - HC - GST

Recovery of GST dues from the debtors - petitioner does not dispute sizeable outstanding dues to the said tax department but pleads extreme financial hardship in clearing such dues in single installment - Held that - When this Court has by interim order stayed coercive recoveries of the dues of the petitioner, the respondents could not have insisted on ONGC either paying up the dues of the petitioner to the department or even prevented ONGC from releasing such payments in favour of the petitioner. This would be plainly carrying out coercive recoveries of the dues which this Court by way of interim injunction prevented the department from doing. Notice returnable on 29.11.2018.

Summary

Issues:
- Granting installments for clearing Government dues
- Enforcement of garnishee order by the tax department
- Coercive recoveries of dues during the pendency of an interim order

Analysis:
The judgment revolves around the petitioner seeking installments for clearing significant outstanding dues to the tax department due to extreme financial hardship. Initially, an order was passed directing the petitioner to pay GST dues in installments, with a stay against coercive recoveries upon compliance with specified conditions. However, the respondent failed to file a reply by the subsequent hearing date. The petitioner raised concerns about the tax department enforcing a garnishee order on ONGC, despite complying with the interim order's terms. The court emphasized that coercive recoveries should not be pursued while the interim stay is in place, preventing the department from pressuring ONGC to pay the dues directly. A further notice was issued, and the communication enforcing coercive actions was stayed, clarifying that compliance with the interim order should prevent any compulsion on debtors to pay directly to the department.