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2021 (4) TMI 918 - HC - GSTRecovery of Government dues (Central Goods and Services Tax) - period of July, 2017 to March, 2019 - seeking time for filing counter-affidavit - HELD THAT - Time limit for completion or compliances has been extended further up to 30.11.2020 vide CBIC Circular dated 01.09.2020 at page 259. Petitioner on his own bonafide has deposited ₹ 15 lacs towards the tax dues. However, due to Covid-19 situation and on account of the garnishee notice, his business is at a stand still. Learned counsel for the respondent CGST Mr. Amit Kumar submits that statement of facts have been received, but he would require one week time to file counter affidavit. Learned counsel for the respondent has however has not been able to reply to the specific contention of the petitioner as to how despite the CBIC Circular dated 03.04.2020 and its extension by circular dated 01.09.2020 such notice has been issued - As prayed for, one week time is allowed to the learned counsel for the respondents to file counter affidavit. Matter be listed on 03.02.2021. Affidavit be filed latest by 29.01.2021 with advance copy to the learned counsel for the petitioner.
Issues:
1. Notice under Section 79 of the CGST Act issued without adjudication process. 2. Alleged recovery of government dues without considering input tax credit. 3. Petitioner's tax liability and pending appeal before NCLAT. 4. Representation made to Deputy Commissioner regarding ITC claim. 5. Reference to CBIC circular on time limit extensions due to COVID-19. 6. Impact of COVID-19 on petitioner's business and tax payments. 7. Delay in filing counter affidavit by respondents. Analysis: 1. The petitioner raised concerns about a notice issued under Section 79 of the CGST Act for the recovery of government dues without undergoing the required adjudication process under Sections 73 and 74 of the Act. The dues were calculated based on a single GSTR-1 statement, overlooking the input tax credit claimed through the GSTR-3B statement. 2. The petitioner disclosed a substantial input tax credit (ITC) amounting to ?3,04,15,359, which the authorities failed to consider while alleging a tax liability of ?1,14,53,646.91. The petitioner's ITC claim was crucial, and the withholding of funds by a third party complicated the matter, leading to legal actions such as approaching the NCLT under the Insolvency and Bankruptcy Code. 3. Despite admitting to a tax liability and making efforts to settle the dues, the petitioner's business operations were severely impacted by the COVID-19 situation and the garnishee notice. The petitioner expressed willingness to pay the tax liability in installments and deposited ?15 lakhs voluntarily, emphasizing the need for fair treatment regarding the ITC claim. 4. The petitioner made representations to the Deputy Commissioner, highlighting the discrepancies in the notice issued under Section 79 and the denial of the ITC claim. The petitioner's legal counsel referenced a CBIC circular dated 03.04.2020, which extended time limits for compliance due to the pandemic, emphasizing the relevance of this circular to the petitioner's case. 5. The respondents, represented by Mr. Amit Kumar, acknowledged receiving the facts but requested additional time to file a counter affidavit. The delay in responding to the petitioner's contentions regarding the issuance of the notice despite the CBIC circulars raised concerns about the procedural fairness in handling the petitioner's case. 6. The court granted the respondents a week to file the counter affidavit and scheduled the matter for further hearing. To alleviate the petitioner's immediate financial burden, a conditional stay was placed on coercive actions if the petitioner deposited ?20 lakhs within ten days. The petitioner was also permitted to file a rejoinder before the next hearing date. This detailed analysis of the judgment from the Jharkhand High Court encapsulates the issues raised by the petitioner, the legal arguments presented, and the court's directions regarding the pending tax dispute and procedural fairness in the case.
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