2024 (3) TMI 1274 - HC - GST

Validity of garnishee orders - shortfall in amount to fulfil the entire pre-deposit requirement of 30% of the disputed tax demand - HELD THAT - As regards amounts payable as per the order in original the documents on record disclose that the entire tax liability was discharged and all that remains is interest and penalty. As regards the order in original corresponding to W.P.No.8178 of 2024 an aggregate sum of Rs. 1, 87, 374/- has been remitted towards the disputed tax demand leaving a balance of Rs. 1, 72, 989/- to fulfil the 30% pre-deposit requirement under Section 112(8) of applicable GST enactments. If 30% of the disputed tax demand is remitted the statute provides for a stay of any recovery or coercive action until the statutory appeal is disposed of. The petitioner is directed to deposit a sum of Rs. 1, 72, 989/- towards fulfilment of pre-deposit requirements in terms of Section 112(8) of applicable GST enactments. Such remittance shall be made within a maximum period of two (2) days from the date of receipt of a copy of this order - Petition disposed off.

Summary

Issues involved:
Challenge to garnishee orders issued to petitioner's bank u/s assessment orders, fulfillment of pre-deposit requirements u/s applicable GST enactments, validity of appellate orders due to non-functional Appellate Tribunal.

Judgment Summary:

1. The writ petitions challenged the garnishee orders issued to the petitioner's bank despite informing tax authorities of pending appeals against assessment orders. The appeals were rejected after remitting 10% of disputed tax demand under each assessment order. The petitioner sought relief due to pending appeals before the Appellate Tribunal.

2. The total tax demand for one petition was Rs. 1,34,22,484, with a shortfall of Rs. 1,72,989 to fulfill the 30% pre-deposit requirement. In the other petition, 30% of the tax demand of Rs. 9,65,824 was partially remitted, leaving a balance to meet the pre-deposit requirement.

3. The senior standing counsel for respondents accepted notice and suggested approaching the Court via writ petitions due to the non-functional Appellate Tribunal, acknowledging the petitioner's situation.

4. The documents revealed that the entire tax liability for one petition was cleared, leaving only interest and penalty. In the other petition, an amount of Rs. 1,87,374 was remitted towards the disputed tax demand, with a balance of Rs. 1,72,989 to fulfill the pre-deposit requirement u/s Section 112(8) of applicable GST enactments.

5. The Court directed the petitioner to deposit the remaining sum of Rs. 1,72,989 within two days to meet the pre-deposit requirements. Upon receipt, garnishee orders would be lifted, allowing the petitioner to operate the bank account. The petitioner was also instructed to file statutory appeals within three months of the State Tribunal President assuming office, with the benefit of Section 112(9) of applicable GST statutes subject to fulfilling the conditions outlined in the judgment. No costs were awarded, and connected petitions were closed.