2023 (6) TMI 987 - HC - GST

Validity of Garnishee notice - appellant has paid the entire tax as demanded and has also preferred an appeal before the appellate authority - before the expiry of the period for filing the appeal, the garnishee notice was issued - HELD THAT - In terms of Section 107(7) of the CGST Act read with Section 107(6) for preferring an appeal, the aggrieved assessee is required to deposit 10% of the disputed tax. It is not in dispute that the appellant has paid the entire tax, which has been noted in the order dated 19th December, 2022 passed under Section 73(9) of the W.B.G.S.T. Act, 2017, which shows that the appellant/petitioner has paid the tax of Rs. 63,03,920.00. Considering the facts and circumstances of the case and also the statutory requirement, which mandates payment of only 10% of the disputed tax, it is opined that a condition need not be imposed by directing the appellant/petitioner to pay 20% of the interest. The appeal is allowed and that portion of the order passed by the learned Single Bench directing the appellant to pay 20% of the interest amount is set aside and direction is issued to the appellate authority to consider the appeal filed by the appellant on merits and in accordance with law after affording an opportunity of personal hearing.

Summary

Issues involved: Challenge against garnishee notice, requirement of deposit for preferring an appeal, imposition of interest liability.

Challenge against garnishee notice: The appellant challenged the garnishee notice dated 13th February, 2023, on the grounds of having paid the entire tax as demanded and having already filed an appeal before the appellate authority. The appellant argued that the garnishee notice was issued before the expiry of the period for filing the appeal.

Requirement of deposit for preferring an appeal: The learned Single Bench had granted a stay on the garnishee notice but imposed a condition that the appellant must deposit 20% of the interest liability, initially quantified as Rs. 24,74,434/-. However, as per Section 107(7) of the CGST Act read with Section 107(6), the aggrieved assessee is required to deposit only 10% of the disputed tax. The appellant had already paid the entire tax amount of Rs. 63,03,920.00 as noted in the order passed under Section 73(9) of the W.B.G.S.T. Act, 2017.

Imposition of interest liability: Considering the statutory requirement mandating payment of only 10% of the disputed tax for preferring an appeal, the Court found that imposing a condition directing the appellant to pay 20% of the interest was unnecessary. The Court held that the appellant should not be required to pay 20% of the interest amount and directed the appellate authority to consider the appeal on its merits and in accordance with the law after providing an opportunity for a personal hearing.

Conclusion: The appeal was allowed, and the portion of the order directing the appellant to pay 20% of the interest amount was set aside. The appellate authority was instructed to review the appeal filed by the appellant in line with the law and after granting a personal hearing. No costs were awarded, and the parties were to receive a certified copy of the order upon fulfilling the legal formalities.