2023 (1) TMI 915 - HC - GST

Attachment of debtors and immovable property of the petitioner - whether the provisional attachment order of the property of the petitioner passed under Sections 79 and 83 of the Act, was liable to continue after filing of the statutory appeals in terms of Section 107 of the Act? - HELD THAT - As per above Chart given by the petitioner in its rejoinder, so far as the assessment year, 2017-18 is concerned, the entire amount demanded by the respondent-Department has already been deposited/recovered. However, there is some deficiency with regard to the assessment year, 2018-19. So far as the assessment years, 2019-20, 2020-21 and 2021-22 are concerned, petitioner has preferred appeals under Section 107 of the Act and it is the case of the petitioner that the requisite amount as per Section 107(6) of the Act has already been deposited with the Department. The said submission made by learned Senior Advocate for the petitioner so far as the appeal preferred by the petitioner with regard to the assessment years, 2019-20 and 2020-21 is concerned, is duly corroborated by the order passed by the appellate authority (Annexure P-6). In the present case, it is the case of the petitioner that for three assessment years, i.e., 2019-20, 2020-21 and 2021-22, petitioner has preferred appeals and has deposited the requisite amount as per Section 107(6) of the Act. Under these circumstances, the recovery proceedings qua the balance amount are deemed to be stayed. Hence, the appellate authority by passing order (Annexure P-6) by only directing to de-freeze the bank account of the petitioner is against the provisions of Section 107(7) of the Act. In fact, the attachment order of the debtors as well as immovable property of the petitioner was also liable to be re-called. This petition is disposed of with a direction that in case the petitioner clears the entire amount due so far as the assessment years, 2017-18 and 2018-19 are concerned, within ten days from today and in case the petitioner has also made the pre-deposit under Section 107(6) of the Act, vis- -vis, assessment year, 2021-22, then the attachment order of the immovable property of the petitioner as well as attachment of the debtors shall be revoked forthwith by the respondents.

Summary

Issues:
1. Whether the provisional attachment order of the property should continue after filing statutory appeals under Section 107 of the Act.

Analysis:
The petitioner filed a petition under Article 226 seeking to quash the attachment order of debtors and immovable property. The petitioner had filed statutory appeals for assessment years 2019-20, 2020-21, and 2021-22, making the required deposit under Section 107(6) of the Himachal Pradesh Goods and Service Tax Act, 2017. Despite this, the attached property and debtors were not released, invoking Sections 79 and 83 of the Act. The respondents argued that the property remained attached to secure remaining taxes, even though the bank accounts were de-frozen.

The main issue revolved around whether the provisional attachment order should continue after the statutory appeals were filed, as per Sections 107(6) and 107(7) of the Act. Section 107(6) mandates a deposit before filing an appeal, and Section 107(7) states that recovery proceedings for the balance amount are stayed upon such deposit. The petitioner had complied with these requirements for the relevant assessment years.

The petitioner had filed appeals for the mentioned assessment years and made the necessary deposits. The appellate authority had granted interim relief and de-froze the bank accounts. The petitioner had also deposited the demanded amounts for some years and had undertaken to deposit the balance within a specified time frame. The petitioner's compliance with Section 107(6) was supported by the appellate authority's order.

The Court held that the recovery proceedings should have been stayed as per Section 107(7) once the petitioner made the required deposits for the appeals. The order only de-freezing bank accounts was deemed against the Act's provisions. Therefore, if the petitioner cleared all due amounts for 2017-18 and 2018-19 within ten days and made the pre-deposit for 2021-22, the attachment orders on property and debtors should be revoked immediately. Any pending applications were also disposed of in light of this decision.