1.Petitioner has filed the petition under Article 226 of the Constitution of India, seeking mainly following relief:- 

“a). A writ in the nature of certiorari may kindly be issued quashing the attachment order in respect of attachment of debtors and immovable property of the petitioner.”

2. Mr. Vishal Mohan, learned Senior Counsel for the petitioner  has submitted that the petitioner has filed statutory appeals with  regard to assessment years, 2019-20, 2020-21 and 2021-22. Petitioner has made the deposit as per Section 107(6) of the Himachal Pradesh Goods and Service Tax Act, 2017 (hereinafter  referred to as ‘the Act’). As per Section 107(7) of the Act, the  recovery proceedings for the balance amount shall be deemed to  be stayed. However, despite specific provision, as envisaged  under Section 107(7) of the Act, the attached property and the  debtors have not been released which were provisionally attached  by invoking provisions of Sections 79 and 83 of the Act. 

3. Ms. Seema Sharma, learned Deputy Advocate General, on  the other hand, has opposed the petition and has submitted that  vide order (Annexure P-6) dated 17.7.2022, the bank accounts of the petitioner have already been de-freezed and with a view to  secure the remaining taxes, the property of the petitioner was  liable to remain under attachment.  
4. In the present case, the controversy involved is, as to  whether the provisional attachment order of the property of the  petitioner passed under Sections 79 and 83 of the Act, was liable  to continue after filing of the statutory appeals in terms of Section  107 of the Act. Thus, the relevant provisions which require  consideration in the present case are Section 107(6) and Section  107(7) of the Act.  

5.Section 107(6) and Section 107(7) of the Act read as under:-

6. Admittedly, petitioner has filed statutory appeal before the  competent authority by depositing the pre-deposit amount as per  Section 107(6) of the Act for the assessment years, 2019-20 &  2020-21. The fact is evident from order Annexure P-6 dated  17.7.2022, passed by the appellat authority.

7. During the course of arguments, learned Senior Counsel for  the petitioner has submitted that during the pendency of the writ,  statutory appeal has also been preferred with regard to  assessment year, 2021-22 and at the time of filing of the appeal,  requisite amount has already been deposited in terms of Section  107(6) of the Act. Learned Senior Counsel has further submitted  that so far as assessment year, 2017-18 is concerned, the  petitioner has not preferred any appeal and has deposited the \entire amount as per the demand raised by the Department. So  far as assessment year, 2018-19 is concerned, there is deficiency  of around Rs.2,00,000/- with regard to the demand raised by the  Department and petitioner has not preferred any appeal against  the said assessment year. Petitioner undertakes to deposit the  balance amount within ten days from today.   

8. The Chart showing assessment year, demand Department and the amount deposited/recovered, mentioned in  Paragraph 3(c) to (e) of the rejoinder reads as under:-

9. Thus, as per above Chart given by the petitioner in its  rejoinder, so far as the assessment year, 2017-18 is concerned,  the entire amount demanded by the respondent-Department has  already been deposited/recovered. However, there is some  deficiency with regard to the assessment year, 2018-19. So far as  the assessment years, 2019-20, 2020-21 and 2021-22 are  concerned, petitioner has preferred appeals under Section 107 of  the Act and it is the case of the petitioner that the requisite amount  as per Section 107(6) of the Act has already been deposited with  the Department. The said submission made by learned Senior  Advocate for the petitioner so far as the appeal preferred by the  petitioner with regard to the assessmen years, 2019-202020-21 is concerned, is duly corroborated by the order passed  by the appellate authority (Annexure P-6).  

10. So far as the legal proposition in issue is concerned, it is  evident from a combined reading of Sections 107(6) and 107(7) of  the Act that at the time of filing of the appeal, a sum equal to 10%  of the remaining amount on taxes in dispute, in relation to which  the appeal has been preferred, is required to be deposited and  when the amount as envisaged under Section 107(6) of the Act is  deposited, recovery proceedings for the balance amount shall  remain stayed.  

11. In the present case, it is the case of the petitioner that for  three assessment years, i.e., 2019-20, 2020-21 and 2021-22,  petitioner has preferred appeals and has deposited the requisite  amount as per Section 107(6) of the Act. Under these  circumstances, the recovery proceedings qua the balance amount  are deemed to be stayed. Hence, the appellate authority by  passing order (Annexure P-6) by only directing to de-freeze the  bank account of the petitioner is against the provisions of Section  107(7) of the Act. In fact, the attachment order of the debtors as well as immovable property of the petitioner was also liable to bere-called.  

12. Accordingly, this petition is disposed of with a direction that  in case the petitioner clears the entire amount due so far as the  assessment years, 2017-18 and 2018-19 are concerned, within  ten days from today and in case the petitioner has also made the  pre-deposit under Section 107(6) of the Act, vis-à-vis,  assessment year, 2021-22, then the attachment order of the  immovable property of the petitioner as well as attachment of the debtors shall be revoked forthwith by the respondents.   Pending miscellaneous application(s), if any, shall also  stand disposed of.  

In my View, this is basic understanding of GST Laws that 90% of tax demand and 100% of Interest and Penalty would be stayed. One had to pay only 10% of Disputed amount. Interest and Penalty have no independent standing of their own. I have been speaking since ages, it’s high time to train Officers with the trainers who can train them not with those who are just “Yes Man!”! I keep on sharing valuable cases. If you like them please follow my telegram channel to access old caes, PPT and many other files https://t.me/GSTpanacea

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SKYLIGHT MAN POWER AND HOSPITALITY SERVICES

For Reference Visit:

Himachal Pradesh High Court