Kabeer Reality Private Limited VS Union of India

Kabeer Reality Private Limited, a company registered under the Companies Act, 1956, has brought forth a petition challenging an order/notice issued by the Deputy Commissioner of CGST & Central Excise, Division – V, Indore, dated 08.07.2019. The petitioner, aggrieved by this notice, claims ownership of a commercial building located at 2, Kibe Compound, Chawani, Indore. They assert that the notice issued by the Deputy Commissioner aims to initiate recovery proceedings against the tenants of the petitioner. The petitioner alleges that the actions of the Deputy Commissioner are unjust and seeks relief from the court.

Kabeer Reality Private Limited, a company registered under the Companies Act, 1956, has filed a petition in response to an order/notice dated 08.07.2019 issued by the Deputy Commissioner, CGST & Central Excise, Division – V, Indore. The order initiated recovery proceedings against tenants of the petitioner’s commercial building located at 2, Kibe Compound, Chawani, Indore.

The petitioner claims ownership of the building and states that it has various tenants. It is registered under the Central Goods & Service Tax Act, 2017 (referred to as the Act of 2017) and is considered a taxable entity under it. The company’s business activities include renting immovable property and providing allied services.

Previously, on 03.10.2018, a similar order for recovery of service tax dues was issued by respondent No.2, directing tenants to deposit rent with the State Exchequer. This order was withdrawn on 09.07.2019 after the complete recovery of dues along with penalties.

However, respondent No.1 has issued a fresh notice under Section 79(1)(c) of the Act of 2017 to the petitioner’s tenants, initiating recovery proceedings amounting to Rs. 44,43,804/-, which includes tax, cess, interest, etc. The petitioner submitted a reply on 15.07.2019, contesting the legality of the notice/order dated 08.07.2019.

The petitioner alleges that the said notice/order is inherently illegal and has been presumably issued without proper authority or justification.

Kabeer Reality Private Limited, a company registered under the Companies Act, 1956, is aggrieved by an order/notice dated 08.07.2019 issued by the Deputy Commissioner, CGST & Central Excise, Division – V, Indore. This notice was sent to the tenants of Kabeer Reality Private Limited, initiating recovery against them. The petitioner company owns a commercial building in Indore and has various tenants. It is registered under the Central Goods & Service Tax Act, 2017, and operates in renting immovable property and providing allied services.

Previously, on 03.10.2018, a similar order was passed for the recovery of service tax dues, which was withdrawn on 09.07.2019 after full payment. However, respondent No.1 issued a fresh notice to the tenants under Section 79(1)(c) of the Act of 2017, initiating recovery of Rs.44,43,804 on 08.07.2019. The petitioner responded on 15.07.2019, claiming the notice was illegal and contrary to statutory provisions.

The petitioner argues that the respondent did not follow prescribed procedures for demand and recovery under the Act of 2017. They contend that without determining the tax payable by the taxable person, recovery cannot be initiated under Section 79(1)(c). Moreover, they assert that without a notice of demand issued to them under Section 73 of the Act, no recovery can be made.

The petitioner also argues that the respondents’ actions are against the provisions of Section 79 of the Act of 2017, thus the impugned order should be quashed. They further claim that they were not provided an opportunity of hearing before the order was passed, and therefore, the rent cannot be adjusted towards tax dues.

In summary, Kabeer Reality Private Limited is challenging the legality of the recovery notice issued by the Deputy Commissioner, CGST & Central Excise, Division – V, Indore, arguing that it violates statutory provisions and denies them a fair opportunity to respond. They seek the quashing of the order and relief from the recovery proceedings initiated against their tenants.

The case involves Kabeer Reality Private Limited, a company registered under the Companies Act, 1956, which has filed a petition challenging an order/notice issued by the Deputy Commissioner of CGST & Central Excise, Division – V, Indore. The notice, dated 08.07.2019, was issued to the tenants of the petitioner for initiating recovery against them.

The petitioner asserts ownership of a commercial building in Indore and has multiple tenants. They claim to be registered under the Central Goods & Service Tax Act, 2017, and engage in renting immovable property along with allied services. Previously, a similar recovery order was issued on 03.10.2018, which was withdrawn on 09.07.2019 after the petitioner cleared their dues.

However, the petitioner alleges that a new notice was issued on 08.07.2019, under Section 79 (1)(c) of the Act, seeking to recover Rs. 44,43,804/- from the tenants. The petitioner contends that this notice is illegal and contravenes statutory provisions.

Several arguments are presented by the petitioner. They claim that proper procedure regarding demand and recovery, as outlined in the Act of 2017, was not followed. Additionally, they argue that without a determination of tax payable by the taxable person, recovery cannot be initiated under Section 79 (1)(c). The petitioner emphasizes the necessity of a notice of demand under Section 73 before any recovery can be made.

The petitioner asserts that the actions of the respondents violate Section 79 of the Act and seek the quashing of the impugned order. They argue that as no opportunity for a hearing was provided before passing the order, the adjustment of rent towards tax dues is unjustified.

In their prayers for relief, the petitioner requests the court to quash the notices dated 08.07.2019, to halt the recovery proceedings, and to direct the respondents to adhere to the provisions of Chapter XV of the CGST Act, 2017.

The respondents, in their reply, argue that they acted in accordance with the law, specifically citing Sections 78 and 79 of the Act, which empower them to initiate recovery proceedings.

The matter is now before the court for adjudication.

Download PDF:

For Reference Visit:

Read Another Case Law:

GST Case Law: