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2025 (4) TMI 807 - HC - GSTInitiation of recovery proceedings initiated through the notice for recovery of demand dated 13.02.2025 which demands payment of tax interest and penalty despite non-constitution of GST Tribunal and the payment of requisite pre-deposit by the petitioner in terms of Section 112 (8) and in violation of Circular dated 11.07.2024 bearing No. 224/18/2024 - HELD THAT - Upon notice reply by way of affidavit dated 05.03.2025 of Karanbir Singh Exicse Taxation Officer-cum-Proper Officer Ward No.2 Mansa on behalf of the respondents was filed. In view of the stand taken by the respondents the present writ petition is disposed of as having been rendered infractuous.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are as follows: 1. Whether the recovery proceedings initiated through the notice dated 13.02.2025 were valid in light of the non-constitution of the GST Tribunal and the payment of the requisite pre-deposit by the petitioner under Section 112(8) of the CGST/PGST Act, 2017. 2. Whether the impugned recovery notice should be quashed based on the CBIC Circular No. 224/18/2024 dated 11.07.2024, which indicates that recovery of the remaining amount should be stayed upon payment of the pre-deposit. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of Recovery Proceedings in the Absence of GST Tribunal - Relevant Legal Framework and Precedents: The legal framework involves Section 112(8) of the CGST/PGST Act, 2017, which requires a pre-deposit for appeals. The non-constitution of the GST Tribunal is a significant factor because it affects the petitioner's ability to appeal the order dated 17.02.2020. - Court's Interpretation and Reasoning: The Court considered the petitioner's argument that the recovery proceedings should not proceed because the GST Tribunal was not constituted, and the requisite pre-deposit had been made. The Court noted that the CBIC Circular No. 224/18/2024 provides guidelines for such situations, indicating that recovery should be stayed upon pre-deposit. - Key Evidence and Findings: The petitioner had made the requisite pre-deposit as per Section 112(8). The respondents admitted that the notice was issued without knowledge of this pre-deposit, which rendered the notice inadvertently issued. - Application of Law to Facts: The Court applied the provisions of Section 112(8) and the guidelines from the CBIC Circular to determine that the recovery proceedings should not have been initiated given the circumstances. - Treatment of Competing Arguments: The respondent's affidavit acknowledged the mistake, aligning with the petitioner's argument that the recovery should be stayed. - Conclusions: The recovery proceedings were deemed invalid due to the petitioner's compliance with the pre-deposit requirement and the non-constitution of the GST Tribunal. Issue 2: Quashing of the Impugned Recovery Notice - Relevant Legal Framework and Precedents: The CBIC Circular No. 224/18/2024 provides that upon payment of the pre-deposit, recovery of the remaining amount should be stayed, aligning with Section 112(9) of the CGST/PGST Act, 2017. - Court's Interpretation and Reasoning: The Court interpreted the circular as binding and applicable, given the petitioner's compliance with the pre-deposit requirement. - Key Evidence and Findings: The respondents admitted that the notice was issued without knowledge of the pre-deposit, and the circular mandates a stay on recovery. - Application of Law to Facts: The Court applied the circular and the statutory provisions to conclude that the recovery notice should not have been issued. - Treatment of Competing Arguments: The respondents did not contest the applicability of the circular once the oversight was acknowledged. - Conclusions: The impugned recovery notice was effectively quashed as it was issued contrary to the guidelines provided in the circular. SIGNIFICANT HOLDINGS - The Court held that the recovery proceedings were invalid due to the non-constitution of the GST Tribunal and the petitioner's compliance with the pre-deposit requirement. - The Court emphasized the binding nature of the CBIC Circular No. 224/18/2024, which mandates a stay on recovery upon payment of the pre-deposit. - The final determination was that the writ petition was rendered infructuous due to the respondent's acknowledgment of the oversight and the subsequent stay on recovery as per the circular.
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