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TMI BlogKNOW YOUR LIMITS PART 1X X X X Extracts X X X X X X X X Extracts X X X X ..... KNOW YOUR LIMITS PART 1 X X X X Extracts X X X X X X X X Extracts X X X X ..... badly the orders are commented by the High Courts, it is proposed to publish 10 articles on various case laws passed by High Courts in the coming days. 2. Principles of Natural Justice: Day in and day out, hundreds of orders are being passed without providing the opportunity of personal hearing in line with Section 75(4). However, only a few taxpayers go for writ in the jurisdictional High Court where the cases are mostly remanded to the original adjudicating authority for reconsideration of the case after providing an opportunity of personal hearing. However, in most of the cases, taxpayer end up paying the taxes with applicable interest either due to the fact that WRIT is expensive or they do not wish to fight for small amounts. 3. High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court of Patna: The High Court has come across an interesting issue, where due to over enthusiasm to collect more GST, the authorities proceeded to recover the tax amount directly from Debtors from whom money was due to the taxpayer. The interesting aspects are covered in subsequent paras. 4. Order Dated 01/05/2025: The High Court in the case of KAUSHLENDRA KUMAR VERSUS THE STATE OF BIHAR THROUGH THE COMMISSIONER OF STATE TAX, PATNA, THE ASSISTANT COMMISSIONER OF STATE TAX, JEHANABAD, MAGADH, BIHAR, THE ADDITIONAL COMMISSIONER OF STATE TAX, MAGADH DIVISION, GAYA, BIHAR, THE DEPUTY GENERAL MANAGER OF BIHAR STATE BUILDING CONSTRUCTION CORPORATION LIMITED, PIU, GAYA - 2025 (5) TMI 384 - PATNA HIGH COURT has held in para 34 that the unco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditional apology of the Assistant Commissioner is noted and the Court has accepted the apology. Accordingly, no cost is imposed on the Assistant Commissioner. 5. The Case: The petitioner filed the return for the month of March 2020 in December 2020 and claimed applicable ITC. This happened due to the fact that the petitioner was affected by COVID 19 during that period. The ITC claimed was denied under section 16(4) and the order was passed on 09/02/2021. Even though section 16(5) is having retrospective effect from 01/07/2017 itself, as this section was inserted only through Finance (No 2) Act 2024, the order is apparently acceptable. 6. APPEAL: The petitioner went on appeal with the first appellate authority and the appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority also rejected the appeal on 30/11/2022. As the law stood at that time, it was acceptable. 7. PRE DEPOSIT: The petitioner has already paid the pre deposit of 10% before preferring the First Appeal. The order confirming the amount was passed on 30/11/2022. The petitioner could not file any further appeals as GSTAT is not functional as of now. 8. Section 16(5): As this section overrides 16(4) and applies for the applicable period, the counsel for respondent has agreed for remanding the case to the original authority. However, it was initially argued by revenue that the writ was not maintainable. Only after the newly inserted section 16(5) was referred to the counsel of revenue, the revenue agreed for remand. 9. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 78: Section 78 is on initiation of recovery proceedings. This section provides a time limit of three months to the taxpayer to make the payment of the tax. However, there is an option to file appeal with GSTAT by paying additional 10% (Over and above the initial 10%) within 90 days. Unfortunately GSTAT or website of GSTAT are NON FUNCTIONAL even as on date. 10. Section79: This section is on Recovery of tax. The proper officer may take action under this section after three months from the date of the order confirming the demand of GST, provided the taxpayer has not paid any tax. 11. OVER ENTHUSIASM: The proper officer has initiated recovery proceedings and also recovered the full tax amount on 02/01/2023 it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self, even though the three months period ends only on 28/02/2023. Thus, the tax was recovered in violation of statutory provisions. (Para 32 of the order) 12. CLIMAX: It was initially argued by revenue that the action of recovery by the proper officer was correct. Only when the Court insisted the counsel for revenue to give the correct legal position on both the sections 78 as well as 79, the counsel admitted that section 79 should be invoked only after three months from the date of the order which confirms the demand of tax.. 13. Para 33: The Court has ordered to repay the entire amount to the petitioner along with 6% interest from the date of recovery till the date of payment of the recovered amount. This payment of tax plus interest t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be made within two weeks from the date of the High Court Order. 14. Taxpayers: The taxpayers who get adverse orders from First Appellate Authority and would like to contest further may pay additional pre deposit of 10% of disputed tax (After paying entire undisputed amount) and inform the proper officer about that pre deposit as well as the intention to file Appeal in GSTAT as and when it becomes possible. 15. Conclusion: Revenue may take due care in future to ensure that action under Section 79 are not taken in a routine manner immediately on passing of orders. The statutory time limit of three months should be considered in all cases to avoid any strictures or imposition of cost on the revenue by taking the clue from the above order.< ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... br> Scholarly articles for knowledge sharing by authors, experts, professionals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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