Patna High Court: In a case wherein, a writ petition was filed by the assessee-petitioner, National Insurance Company Limited against the order of rejection of appeal by the first Appellate Authority despite the payment of 20% of the tax in dispute for proper institution of appeal, the Division Bench of K. Vinod Chandran, CJ.,* and Rajiv Roy, J., allowed the writ petition and directed the refund of tax recovered and further, imposed a cost of Rs 5000 on the Assessing Officer who issued the demand and appropriated the money from the bank account of petitioner.
An appeal was filed by petitioner against the assessment order dated 17-02-2022 and the same was rejected. There was no Appellate Tribunal constituted as provided under Section 109 of the Bihar Goods and Services Tax Act, 2017 (‘BGST Act’). Inspite of this, petitioner paid 20% of the tax in dispute which was Rs 5.70 crores as per Section 112(8) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’). When the appeal was filed, admittedly, 10% of the tax in dispute was paid, which was mandated for the institution of a proper appeal before the first Appellate Authority. Despite the payment of 20% of the tax in dispute made, the first Appellate Authority rejected the appeal, and a demand was issued. Petitioner filed the present writ petition aggrieved by the coercive action. The tax authorities in retaliation recovered the entire balance remaining payable, under Section 79 of the CGST Act.
The Court opined that if the Tribunal was constituted and an appeal was filed there could be no further proceedings taken for recovery of the balance amounts till the appeal was disposed of. Hence, when a Tribunal was not constituted, no such recovery could have been made.
The Court relied on Sita Pandey v. State of Bihar, 2023 SCC OnLine Pat 2827, and directed the refund of the entire recovered amount within two weeks and imposed a cost of Rs 5000 on the Assessing Officer, who issued the demand and appropriated the money from the bank account of petitioner. The Court further opined that petitioner should be entitled to claim interest from the department for the period in which the assessee was deprived of the amounts peremptorily recovered.
[National Insurance Co. Ltd. v. State of Bihar, 2024 SCC OnLine Pat 318, decided on 15-01-2024]
*Judgement Authored by: Chief Justice K. Vinod Chandran
Advocates who appeared in this case :
For the Petitioner: Gautam Kumar Kejriwal, Alok Kumar Jha, Mukund Kumar, Akash Kumar and Aditya Raman, Advocates
For the Respondents: Vivek Prasad, GP-7
