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2022 (4) TMI 191 - HC - GSTMaintainability of petition - availability of alternative remedy of appeal - non-constitution of appellate authority - mandatory deposit for maintaining an appeal before Tribunal - case of petitioner is that petitioner is having good case on merits but appeal has been decided without hearing petitioner - HELD THAT - Considering the fact that the petitioner is having remedy of filing statutory appeal before Appellate Tribunal under CGST/SGST Act, which is presently not functioning in State of Chhattisgarh, and further considering that if petitioner deposits 20% of disputed tax component alongwith memo of appeal before Appellate Tribunal, then there shall be deemed stay of recovery of balance amount under sub-section 9 of Section 112 of the CGST/SGST Act, it is directed that effect and operation of notice under Section 79 in the Form DRC-13, issued by respondent-department shall remain stayed till the next date of hearing. List this case in week commencing 25.04.2022.
Issues Involved:
1. Scrutiny proceeding under CGST/SGST Act initiated against petitioner. 2. Imposition of total liability on petitioner including tax, interest, and penalty. 3. Appeal process under Section 107 of CGST/SGST Act. 4. Requirement of mandatory deposit for maintaining an appeal before Tribunal. 5. Recovery of amount from petitioner's bank account. 6. Petitioner's plea for stay of recovery and hearing of writ petition on merits. Analysis: 1. The petitioner is challenging the scrutiny proceeding initiated under the CGST/SGST Act, where a total liability of ?2,47,58,078 has been imposed, including tax, interest, and penalty. The petitioner appealed under Section 107 of the Act, with a mandatory deposit of 10% of the disputed tax component. The appeal was admitted and decided in the absence of the petitioner based on available documents and records. 2. The Respondent authorities issued a notice under Section 79 of the CGST/SGST Act after the dismissal of the first appeal. Before filing the writ petition, an amount of ?34,99,000 was recovered from the petitioner's bank account. The petitioner contends that the recovery exceeds the mandatory deposit required for maintaining an appeal before the Tribunal. 3. The Respondent State Counsel argues that the petitioner has short-paid the tax liability, justifying the imposition of interest and penalty. Proper opportunities were provided to the petitioner before the First Appellate Authority. The appeal was decided based on the material available as the petitioner failed to appear despite multiple adjournments. 4. The petitioner's counsel highlights the mandatory deposit requirement of 20% of the disputed tax component for filing an appeal before the Tribunal. The petitioner had already deposited a portion of the amount, and the recovery made by the department has surpassed the total mandatory deposit, raising concerns about the excess recovery. 5. The UCO Bank, as the Respondent No.6, confirms the preparation of a Demand Draft based on the demand from the Commissioner of the GST Department under DRC-13. The recovery process from the petitioner's bank account is substantiated by the documents placed on record. 6. The Court, after considering the facts and circumstances, acknowledges the petitioner's remedy of filing a statutory appeal before the Appellate Tribunal under the CGST/SGST Act, which is not currently functioning in the State of Chhattisgarh. The Court directs a stay on the operation of the notice issued by the respondent-department under Section 79 until the next hearing date, allowing time for further submissions and listing the case for the following week.
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