TMI Blog2023 (9) TMI 1179X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of deposit of GST to Electronic Cash Ledger till the issue is decided by Hon ble High Court. A perusal of Sections 73, 74 and 79 of CGST Act and Rules, 2017 indicate that before issuing garnishee proceedings under Section 79, the authorities shall issue notice to the assessee in terms of Section 73(1) and provide an opportunity to the assessee to submit his reply to the notice and only thereafter, the authorities shall proceed further by taking into consideration the reply / explanation provided by the assessee. In the case of VISION DISTRIBUTION PVT. LTD. VERSUS COMMISSIONER, STATE GOODS SERVICES TAX ORS. [ 2019 (12) TMI 1048 - DELHI HIGH COURT] , Hon ble Delhi High Court held that the taxpayer cannot be made to suffer for no fault of his own, on account of failure of the Government in devising smooth GST systems providing of debiting the Electronic Cash Ledger without filing of GSTR 3B Return. In the present case, admittedly, the respondent authorities have not issued any notice in terms of Section 79(1) of CGST Act, 2017 to the assessee to submit his reply/explanation to the demand notice for delay payments. Instead, the respondent Authorities have straight away issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 to January, 2023 along with calculation indicating month wise interest payable on delay in filing of GSTR 3B return. The petitioner was informed to reconcile the interest and pay the same within 07 days of receipt of letter to avoid recovery under section 79 of the CGST Act, 2017. 3. That due to financial crisis, there was a delay in payment of tax dues, however, the petitioner paid the dues along with interest @18% for the delayed period in accordance with section 50 of the GST Act basing on its own calculations. That in response to notice dated 19.06.2023 of the Department, the petitioner submitted letter dated 28.06.2023 seeking three months time for payment of interest in view of severe financial crisis which resulted in late payment of GST and finally requested the authorities not to take any coercive action. 4. In response to the said letter, the petitioner addressed a letter, dated 28.06.2023 informing responding that interest aggregating to Rs.13,07,942/- was paid and further stated that due to severe financial crisis, there was delay in payment of interest, however petitioner sought three months for payment of interest and further, requested to respondent No.3 not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arbitrary, void abinitio and liable to be set-aside. He further submitted that Section 79 of the CGST Act,2017 pertains to Recovery of Tax and is applicable only in cases wherein, any amount is payable by an assessee to the Government under any of the provisions of this Act or the rules made there under and the same is not paid. 9. He further submitted that as per Rule 145 of CGST Rules, 2017, the proper officer may serve upon a person referred to in clause(c) of sub-section (1) of section 79, a notice in FORM GST DRC-13 directing him to deposit the amount specified in the notice. Therefore, for a demand to attain the status of money becoming due to the department for issuance of Form DRC-13, there has to invariably an order of the proper officer, issued under the provisions of Section 73 or 74 of the CGST Act, 2017, as the case may be, unless such liability in question is accepted by the assessee himself. 10. The respondent Authorities failed to appreciate that the provisions of Section 79 are not invokable in respect of demands which are in dispute and not subjected to the process of adjudication, as contemplated under Section 73 or 74 of the CGST Act, 2017, as the case may be. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a notice in writing, require any other person from whom money is due or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the Government either forthwith upon the money becoming due or being held, or within the time specified in the notice not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount; 13. Learned counsel for the petitioner has relied upon following judgments: i. Godavari Commodities Ltd. vs Union of India and Ors [2020(33) G.S.T.L.16(Jhar)] ii.Mahadeo Constructions Co vs Assistant Commissioner 2020(36) G.S.T.L.343(Jhar)] iii Assistant Commissioner of CGST Central Excise and Others vs Daejung Moparts Pvt. Ltd. and Ors W.A.Nos.2127 and 2151 of 2019 iv. LC Infra Projects Pvt. Ltd. vs. The Union of India Ors 2019 (28) G.S.T.L3 (Kar.) v. Vision Distribution Pvt. Ltd. v.Commissioner W.P.(C) 8317/2019 (Del.) vi. Pratibha Processors v. Union of India 1996 (88) E.L.T.12 (SC) 14. He further submitted that in the absence of the rules that were required to be made under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct, since rules were already framed from date of implementation of GST Act, 2017. He further submits that the petitioner paid the tax with delay, thereby invited interest for the delayed period which is 18% per annum. As per the records of respondent authorities, the petitioner was due a sum of Rs.1,28,97,355/- and despite notice, the petitioner failed to pay tax as well as interest on delayed payments. Therefore, the respondent Authorities are justified in issuing garnishee proceedings to the petitioner s bankers under Section 79 of the CGST Act, 2017. 20. Learned Standing Counsel for respondents had referred to section 39, 50, 75(12) and Rules 61(2), 88(B) to impress upon this Bench that the respondent Authorities have duly followed the procedure as provided under GST Act before issuing garnishee proceedings. Section 39, 50, 75 (12) and Rules 61(2), 88(B) of GST Act are reads reproduced for ready reference: As per under Section 39 of the GST Act: Every registered person shall for every calendar month or a part thereof, furnished, a return electronically, inward supplies of goods or services or both, tax payable and tax paid on such other particulars, such form and manner and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed another letter dated 25.07.2023 disputing the interest liability arrived at by the respondents and further requested the authority to demand interest from due date of filing of GSTR 3B Return till the date of deposit of GST to Electronic Cash Ledger till the issue is decided by Hon ble High Court. 25. A perusal of Sections 73, 74 and 79 of CGST Act and Rules, 2017 indicate that before issuing garnishee proceedings under Section 79, the authorities shall issue notice to the assessee in terms of Section 73(1) and provide an opportunity to the assessee to submit his reply to the notice and only thereafter, the authorities shall proceed further by taking into consideration the reply / explanation provided by the assessee. 26. In the case of Mahadeo Constructions Co vs Assistant Commissioner2 , Hon ble Jharkhand High Court held as under:- . If an assessee has allegedly delayed in filing his return, but discharges the liability of only tax on his own ascertainment and does not discharge the liability of interest, the only recourse available to the proper officer would be to initiate proceedings under section 73 (1) of the CGST Act for recovery of the amount of short paid or not pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te. Essentially, it is compensatory and different from penalty-- which is penal in character. 31. In the present case, admittedly, the respondent authorities have not issued any notice in terms of Section 79(1) of CGST Act, 2017 to the assessee to submit his reply/explanation to the demand notice for delay payments. Instead, the respondent Authorities have straight away issued garnishee proceedings under Section 79 of CGST Act, 2017, by which the petitioner s bankers were directed to debit the alleged tax dues, which is referred to 73 of the CGST Act, 2017. 32. In considered opinion of this Bench, there is considerable amount of force in the contention of the petitioner that without providing an opportunity of clarifying / explaining, the respondents authorities have calculated that the petitioner is liable to pay a sum of Rs. 1,28,97,355/- on account of late filing of GSTR 3B Return for the period July, 2017 to January, 2023 and had issued the impugned garnishee notices under Section 47(2) of the CGST Act, 2017. 33. The respondent authorities are required to issue notice to the assessee seeking their response, clarifications for non-payment of tax, interest on late payment prior t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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