The Madras High Court has quashed GST department’s proceedings against the petitioner to the recovery of Tax.
The Petitioner has challenged the proceedings of the first respondent dated 07.08.2019 addressed to the fourth respondent through which, the fourth respondent was directed to recover a sum of Rs.53,28,645/- from the account maintained by the petitioner on the reason that the said sum on account of tax, cess, interest and penalty is payable by the petitioner under the provisions of the GST Act and that the petitioner had failed to make such payment.
The grievance of the petitioner against the impugned proceedings is that the same was issued straightaway, even before making an assessment or at least initiating proceedings for making the assessment. It is the specific case of the petitioner that no proceedings whatsoever was issued against the petitioner for determining either the tax, cess or interest or penalty totally amounting to Rs.53,28,645/- as claimed in the impugned proceedings.
While allowing the petition, Justice Ravichandra Babu observed that, “It is seen that except issuing the proceedings under Section 79, no other proceedings was ever issued against the petitioner determining their tax etc., liability, amounting to Rs.53,28,645/- as claimed in the impugned proceedings”.
The Court also said that, Section 79 of the CGST Act, 2017 contemplates that any amount payable by a person to the Government under any of the provisions of the said Act or the Rules made thereunder is not paid, the proper officer shall proceed to recover the amount by one or more of the modes referred to therein. Therefore, it is evident that the term “amount payable by a person” is to mean that such liability arises only after the determination of such amount in a manner known to law.
The impugned proceedings issued under Section 79 is not sustainable, the Court also added.
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