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TMI Blog2025 (5) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... of State Tax (Appeal), Magadh Division, Gaya in Appeal Case No. JB/GST- 45/2020-21 by which the order dated 09.02.2021 passed by the Assistant Commissioner of State Tax, Jehanabad was upheld and the petitioner was directed to pay the amount of Rs.48,91,868 [Rs. 24,45,934/- of CGST + Rs.24,45,934/- of SGST] along with interest and penalty totally Rs.6,72,534/-. b) For quashing of order dated 09.02.2021 having Reference No. ZD1002210074748 passed by the Assistant Commissioner of State Tax, Jehanabad by which the petitioner was directed to pay total amount of Rs.55,64,402/- [including tax + penalty + interest] failing which a recovery proceeding was to directed to be initiated. c) For quashing of notice having Reference No.- ZD101220030391G dated 31.12.2020 issued by the Assistant Commissioner of State Tax, Jehanabad by which the petitioner was asked to show cause as to why CGST and SGST of Rs.24,45,934/- each totally Rs.48,91,868/- should not be recovered from him. d) For issuance of writ or direction to refund the amount of Rs.50,75,214/- deducted from the beneficiary account of the petitioner bearing account no. PLA-238 available with the Bihar State Building Construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in terms of Section 16(4) of the BGST Act, 2017, the claim for ITC is liable to be rejected. Submissions on behalf of the Petitioner 7. Before this Court, learned counsel for assesseepetitioner has placed sub-Section (5) of Section 16 of the CGST/BGST Act, 2017. It is submitted that sub-Section (5) has been inserted by the Finance Act No. 2 of 2024 with retrospective effect from 01.07.2017 vide Notification No. 17/2024 (S.O. 4253 (E)) - Central Tax, dated 27.09.2024. 8. It is submitted that by virtue of sub-Section (5) of Section 16, the return for the period from financial year 2017-18 to the financial year 2020-21 may be filed up to 30th day of November, 2021 and the registered person shall be entitled to take ITC in any return under Section 39 which would be filed up to this date. Submissions on behalf of the State 9. Mr. Vikash Kumar, learned SC-11 has though initially opposed the writ application but after going through sub-Section (5) of Section 16 of the CGST/BGST Act, 2017, learned counsel submits that in view of the insertion of a new provision which starts with a non-obstante clause, it would be appropriate to remand the matter to the Appellate Authority for a fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason recorded by him in writing, recovery was effected by directly writing to the employer. 16. Learned counsel has relied upon a judgment of learned Co-ordinate Bench of this Court in the case of Sita Pandey versus the State of Bihar and Others reported in (2024) 128 GSTR 137 : 2023 SCC OnLine Pat 2827. It is submitted that in the said case, the recovery was effected only on the next day of the dismissal of the appeal. The learned Co-ordinate Bench has considered Section 78 of the CGST/BGST Act, 2017 and has quoted the guidelines with regard to the recoveries as laid down in UTI Mutual Fund versus Income-Tax Officer and Others reported in (2012) 345 ITR 71 (Bom) : (2012) SCC OnLine Bom 390. 17. In the case of Sita Pandey (supra), the learned Coordinate Bench directed for refund of Rs.69,88,322/- after deducting Rs.7,56,644/- out of the total amount recovered by the Recovery Officer. The learned Co-ordinate Bench held that for maintaining an appeal before the Appellate Tribunal, if constituted, the appellant could have been obliged to pay Rs.7,56,644/- i.e. 20% of the tax dues. A cost of Rs.5,000/- was also imposed upon the Officer who issued Annexure '3' (order in the said ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may require any other specified officer to deduct the amount so payable from any money owing to such person which may be under the control of the proper officer or such other specified officer; (b) the proper officer may recover or may require any other specified officer to recover the amount so payable by detaining and selling any goods belonging to such person which are under the control of the proper officer or such other specified officer; (c) (i) the proper officer may, by 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; (ii) every person to whom the notice is issued under sub-clause (i) shall be bound to comply with such notice, and in particular, where any such notice is issued to a post office, banking company or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or of the cost of the distress or keeping of the property, remains unpaid for a period of thirty days next after any such distress, may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and shall render the surplus amount, if any, to such person; (e) the proper officer may prepare a certificate signed by him specifying the amount due from such person and send it to the Collector of the district in which such person owns any property or resides or carries on his business or to any officer authorised by the Government and the said Collector or the said officer, on receipt of such certificate, shall proceed to recover from such person the amount specified thereunder as if it were an arrear of land revenue; (f) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the proper officer may file an application to the appropriate Magistrate and such Magistrate shall proceed to recover from such person the amount specified thereunder as if it were a fine imposed by him. (2) Where the terms of any bond or other instrument executed under this Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the petitioner failing to deposit the amount within the prescribed period of three months, one of the modes as prescribed under Section 79 of the CGST/BGST Act, 2017 could have been invoked. 25. In course of submissions, learned SC-11 for the State has though initially attempted to justify the recovery but when this Court called upon him to take a view as an Officer of the Court and to assist this Court in rendering justice with a correct interpretation of the two provisions i.e. Sections 78 and 79 of the CGST/BGST Act, 2017, Mr. Vikash Kumar, learned SC-11 has fairly submitted that a conjoint reading of both the provisions would give one and only one interpretation that the Taxing Authority has to wait for three months after service of the order before initiation of the recovery proceeding. 26. In view of the discussions made hereinabove, we find that the recovery of Rs.50,75,214/- effected from the bill of the petitioner through Respondent No. 4 was in haste and in violation of the statutory provision. We deprecate such approach on the part of the Taxing Authority. We are once against tempted to quote what has been observed in the case of R.S. Joshi, Sales Tax Officer, Gujara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Sita Pandey (supra) hereunder:- "16. Following the dictum laid down in UTI Mutual Fund v. Income-tax Officer [2012] 345 ITR 71 (Bom); 2012 SCC OnLine Bom 390, we issue the following guidelines in so far as the recoveries are concerned: (1) There shall be no recovery of tax within the time limit for filing an appeal and when a stay application is filed in a properly instituted appeal, before the stay application is disposed of by the appellate authority; (2) Even when the stay application in the appeal is disposed of, the recovery shall be initiated only after a reasonable period so as to enable the assessee to move a higher forum; (3) However, in cases where the assessing officer has reason to believe that the assessee may defeat the demand or that it is expedient in the interest of revenue, as is provided under the 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 ..... 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