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TMI Blog2023 (9) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... tax authority should also act as a facilitator of business and economy and not merely as an extortionist, always looking to have the pound of flesh, to satisfy his hierarchical superiors to push his/her personal agendas - there are no doubt that the action complained of, was high handed and arbitrary. The Assessing Authority in the scheme of the enactment could not have made recovery of the entire amount. Section 112 provides for twenty per cent of the tax amount due, in addition to the ten per cent amount paid at the first appellate stage, for maintaining a second appeal before the Appellate Tribunal. On such payment being made under Section 112(8), there is also a requirement that the further recovery proceedings would be stayed. Hence, what was required to be paid by the assessee, for maintaining an appeal before the Appellate Tribunal, if constituted, was Rs. 7,56,644.00 being the twenty per cent of the tax dues under the BGST and CGST Act. Hence, the balance amounts from the total sums forfeited of Rs. 69,88,322.00 recovered shall be paid over to the assessee within a period of two weeks from today, failing which interest shall run at the rate of 12 per cent per annum - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the legal issue raised as to exemption since the assessee has an appellate remedy which has not been exhausted and the forum where such appeal is to be instituted has not yet been constituted. We are only concerned with the recovery made, peremptorily and surreptitiously from the bank accounts of the assessee, on the very next day of the rejection of the appeal. 5. Learned counsel for the petitioner Shri Saket Tiwary asserts that the recovery was done in a most arbitrary manner, especially when there was no Appellate Tribunal constituted and there were notifications issued, both by the Central Government and the State Government providing for and extending the period of limitation to commence only from the date of constitution of such Tribunals. It is also pointed out that this Court in such matters have been consistently directing payment of 20 per cent, as provided for in Section 112(8) of the Bihar Goods and Services Tax Act, 2017 (hereinafter referred to as BGST Act ) and staying recovery till the Tribunal is constituted and the limitation of three months from that date is crossed. In the present case, ignoring the statutory provisions and the notifications issued, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued. The recovery notice at Annexure-3 is dated 28.03.2023 and the entire amounts have been recovered which resulted in the present challenge before this Court. 8. The CGST Act provides for constitution of Appellate Tribunal for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority and Section 109 of the BGST Act provides for the said Appellate Tribunal constituted under the CGST Act to also hear the appeals under the BGST Act. Section 112 enables any person aggrieved by an order passed against him under Section 107 or Section 108 of the BGST Act or the CGST Act to appeal to the Appellate Tribunal against such order within three months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal. Sub-section (8) of Section 112 makes it mandatory for an appeal to be instituted; that the appellant pays in full the amount of tax, interest, fine, fee and penalty arising from the impugned order as admitted by him and a sum equal to twenty per cent of the remaining amount of tax in dispute, in addition to the amount paid under Section 107(6). Hence, the admitted amount of tax and other due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctuated from the banks, behind the back of the assessee. The counter affidavit does not speak of any notice having been given to the assessee before recovery. Notices were issued to the banks of the assessee and the amounts remaining in the various accounts forcefully forfeited and paid over to the Tax Department. 11. As far as the statutory provision not requiring a notice to the assessee, we need only refer to the Constitution Bench decision of the Hon ble Supreme Court in Mohinder Singh Gill and another v. The Chief Election Commissioner, New Delhi and others; AIR 1978 Supreme Court 851 from which we extract hereunder Paragraphs 75 and 76:- 75. Fair hearing is thus a postulate of decision-making cancelling a poll, although fair abridgement of that process is permissible. It can be fair without the rules of evidence or forms of trial. It cannot be fair if apprising the affected and appraising the representations is absent. The philosophy behind natural justice is, in one sense, participatory justice in the process of democratic rule of law. 76. We have been told that wherever the Parliament has intended a hearing it has said so in the Act and the rules and inferenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons are recorded in writing, there is a duty on the Assessing Officer to specify the time within which the amounts are to be paid which intimation has to go to the assessee. 14. In this context, we also have to notice that the Appellate Tribunal under Section 109 of the CGST Act has not yet been constituted. We would not rely at all on the equitable directions issued by this Court in various petitions staying recovery on payment of twenty per cent of the balance tax due as provided under Section 112(8). However, it is very evident that even the Central Government and the State Government was conscious of the fact of the Tribunal having not yet been constituted. Two notifications, one of the Central Government and the other of the State Government, are produced as Annexure 8 and 9 along with the writ petition. Both these notifications invoke the power conferred respectively under Section 172 of the CGST and BGST Act. For removal of difficulties, presumably for reason of the non-constitution of the Tribunal, the three months limitation period stipulated under sub-section (1) of Section 112 of both the enactments are extended to the latter of the following dates; (i) of communicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proviso to Section 78, there can be a recovery but with notice to the assessee, which notice shows the reasons for initiating it and specifies the lesser time within which the assessee is directed to satisfy the dues; (4). Though a bank account could be attached; before withdrawing the amount, reasonable prior notice should be furnished to the assessee to enable the assessee to make a representation or seek recourse to a remedy in law; (5). We also remind the Tax Authorities, as was done in the UTI Mutual Fund (supra) that the authorities under the tax enactment shall not act as a mere tax gatherer but act as a quasi-judicial authority vested with the public duty of protecting the interest of the Revenue while at the same time balancing the need to mitigate the hardship to the assessee (sic-UTI Mutual Fund). 17. We cannot but find a definite overreach by the tax authority, the officer who issued Annexure-3 order, to surreptitiously recover the amounts due as per the assessment order passed, from the bank accounts of the assessee, without proper intimation being given to the assessee or a time specified for the assessee to satisfy the demands; even if the actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.00 has been reduced from the total demand raised under Annexure-2 order, presumably, the ten per cent payment made by the assessee at the first appellate stage. 20. Hence, what was required to be paid by the assessee, for maintaining an appeal before the Appellate Tribunal, if constituted, was Rs. 7,56,644.00 being the twenty per cent of the tax dues under the BGST and CGST Act. Hence, the balance amounts from the total sums forfeited of Rs. 69,88,322.00 recovered shall be paid over to the assessee within a period of two weeks from today, failing which interest shall run at the rate of 12 per cent per annum. If the amounts are satisfied within two weeks, as directed hereinabove, it is made clear that if eventually the demand is confirmed against the assessee, there shall not be any interest claimed under the statute between the date on which the amounts were credited by the banks as per Annexure-3 order and the date of refund as directed hereinabove; since the State had the benefit of the amounts in its coffers. If the liability is set aside then for the periods the assessee was deprived of the amounts recovered, she shall be entitled to claim interest from the department. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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