2024 (9) TMI 1536 - HC - GST

Attachment of petitioners bank account - challenge to steps taken by the respondents pursuant to an order of rectification - irregular recovery of amount before expiry of appeal filing period - HELD THAT - Having ascertained that the petitioners, till date, have not preferred any appeal from the order passed under Section 73 of the said Act, in respect whereof, the petitioners had sought for rectification which was turned down by order dated 2nd May 2024, the petitioners cannot be permitted to challenge the aforesaid order dated 7th December, 2023 or the order dated 2nd May, 2024, before this Court by invoking the extra ordinary writ jurisdiction, especially when there is an efficacious alternate remedy available to the petitioners. The petitioners are permitted to approach the appellate authority. In the event, the petitioners approach the appellate authority within a period of 15 days from date, the appellate 2 authority, having regard to the pendency of the writ petition before this Court, shall condone the delay and hear out the appeal on merits with in a period of 8 weeks from the date of filing of the appeal. In the event, the appeal is filed with in the time prescribed here in above, and if it is found that 10 per cent of the tax in dispute has already been recovered from the petitioner or in the alternative if the above amount is deposited as pre-deposit along with the appeal, having regard to the provisions contained under Section 107(7) of the said Act, the orders which shall form subject matter of challenge before the appellate authority, shall be deemed to be stayed and consequentially, the order of attachment of the petitioners bank account issued in Form GST DRC 13 dated 25th June, 2024 shall not be given further effect. Petition disposed off.

Summary

Issues:
Challenge to steps taken by respondents pursuant to an order of rectification dated 2nd May 2024; Recovery of amount before expiry of appeal filing period; Jurisdiction to challenge orders before High Court without exhausting alternate remedy.

Analysis:
The petitioners filed a writ petition challenging the actions taken by the respondents following an order of rectification dated 2nd May 2024, related to a determination made under Section 73 of the WBGST / CGST Act, 2017 for the tax period from July 2017 to March 2018. The respondents proceeded to enforce their demand and attached the petitioners' bank account. The petitioners argued that a recovery of Rs.88,635/- was made from their Electronic Cash Ledger before the appeal filing period had expired, constituting 43% of the demanded tax. They contended that this recovery was irregular as the appeal filing period had not yet lapsed. The High Court noted that the petitioners had not appealed the order dated 2nd May 2024, which denied their rectification request. The Court held that the petitioners could not challenge the orders before the High Court without exhausting the alternate remedy of appeal.

The Court allowed the petitioners to approach the appellate authority within 15 days from the judgment date. The appellate authority was directed to condone any delay in filing the appeal due to the pendency of the writ petition and hear the appeal on merits within 8 weeks from the appeal filing date. If it was found that more than 10% of the tax in dispute had already been recovered from the petitioners, no further pre-deposit would be required. The orders subject to challenge before the appellate authority would be stayed if the appeal was filed within the prescribed time, and the attachment order of the petitioners' bank account would not be given further effect.

The writ petition was disposed of with these directions, and all parties were instructed to act based on the server copy of the order downloaded from the Court's official website.