2024 (12) TMI 588 - HC - GST

Recovery of alleged outstanding demand for the period of 2018-19 - case of the petitioner is that petitioner is willing to deposit the statutory pre-deposit amount - HELD THAT - To enable the petitioner to avail of the benefit of Circular dated 11.07.2024 issued by Central Board of Indirect Taxes and Customs, this petition is disposed off by directing that the Electronic Credit Ledger of the petitioner shall be unblocked to enable petitioner to make predeposit of the said amount. On petitioner making pre-desposit of said amount and complying with other requirements of Circular dated 11.07.2024, no further coercive action shall be taken against petitioner, pursuant to order dated 25.01.2024 for the tax period of 01.04.2018 to 31.03.2019. Further coercive action taken against petitioner pursuant to said assessment proceeding of blocking of the Electronic Credit Ledger and holding of bank account, shall be deemed to be quashed on petitioner making the pre-deposit. It is clarified that petitioner should first make the pre-deposit from the Electronic Credit Ledger and that only in case petitioner makes the pre-deposit, petitioner would be permitted to operate the Electronic Credit Ledger and hold on the bank account shall be lifted. Petition is disposed off.

Issues:
1. Coercive measures for recovery of alleged outstanding demand by GST department.
2. Initiation of proceedings under Section 74 of the Central Goods and Services Tax, 2017.
3. Impugning the demand before the appellate Authority.
4. Inability to prefer an appeal due to non-functioning of the Tribunal.
5. Blocking of Electronic Credit Ledger and holding of bank account.
6. Liability to pay 20% of the tax amount under Section 112 of the Act, 2017.
7. Circular dated 11.07.2024 issued by Central Board of Indirect Taxes & Customs.
8. Statutory pre-deposit amount and compliance with guidelines for recovery of outstanding dues.
9. Direction to unblock Electronic Credit Ledger for pre-deposit.
10. No further coercive action upon compliance with Circular dated 11.07.2024.
11. Clarification on pre-deposit and operation of Electronic Credit Ledger.
12. Court's non-consideration of merit or contention of parties in assessment proceedings.
13. Authority to proceed further if petitioner fails to comply with Circular dated 11.07.2024.

Analysis:
The High Court addressed the issue of coercive measures taken by the GST department for the recovery of an alleged outstanding demand against the petitioner. The petitioner was aggrieved by the action, which led to the initiation of proceedings under Section 74 of the Central Goods and Services Tax, 2017. Initially, a demand of Rs. 38,93,378/- was created, but through the appellate process, it was reduced to Rs. 14,69,451/-. The petitioner intended to appeal further but faced challenges due to the non-functioning of the Tribunal, resulting in the blocking of the Electronic Credit Ledger and holding of the bank account.

The Court considered the petitioner's liability to pay 20% of the tax amount under Section 112 of the Act, 2017. The petitioner sought to deposit the statutory pre-deposit amount as per the Circular dated 11.07.2024 issued by the Central Board of Indirect Taxes & Customs. The Circular provided guidelines for recovery of outstanding dues when appellate Tribunals are not functioning, allowing taxpayers to make pre-deposits from their Electronic Credit Ledger to avail the benefit of stay.

Upon noting that the petitioner had sufficient credit in the Electronic Credit Ledger to make the pre-deposit, the Court directed the unblocking of the ledger for this purpose. It further instructed that upon compliance with the Circular, no further coercive action would be taken against the petitioner. The Court clarified that the petitioner must first make the pre-deposit from the ledger to lift the hold on the bank account.

Importantly, the Court emphasized that it did not delve into the merits or contentions of the assessment proceedings. It also warned that if the petitioner failed to comply with the Circular and did not avail the remedy of filing an appeal, the respondent authorities could proceed further in accordance with the law. Ultimately, the petition was disposed of with the above terms, providing relief to the petitioner while ensuring compliance with the statutory provisions and guidelines.

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