Case Title | V.N. Mehta & Company vs The Assistant Commissioner, The Superintendent of GST & Central Excise, The State Tax Officer |
Court | Madras High Court |
Honorable Judges | Justice K. Ravichandrabaabu |
Citation | 2022 (11) GSTPanacea 323 HC Madras W.P.No.26187, 25551, 25552 & 25553 of 2019 |
Judgement Date | 08-November-2019 |
Council for Petitioner | Mr. P.Rajkumar |
Council for Respondent | Mr. M.Santharaman and M.Hariharan |
In favour of | Petitioner |
Section | Section 62, 63,64,67,73,74 and 83 of the CGST Act,2017 |
The Madras High Court, bench of Justice K. Ravichandrabaabu, has held that the Revenue should determine the tax liability by resorting to procedures as per law rather than issuing the proceedings straightaway u/s 79, based on such statement later retracted. Hence the proceedings initiated u/s 79 is unsustainable.
FACTS OF THE CASE
This writ petition is filed challenging the proceedings of the first respondent dated 07.08.2019 addressed to the fourth respondent through which, the fourth respondent was directed to recover a sum of Rs. 53, 28,645/- from the account maintained by the petitioner on the reason that the said sum on account of tax, cess, interest and penalty is payable by the petitioner under the provisions of the GST Act and that the petitioner had failed to make such payment.
it is contended by the petitioner that Section 79 of the Central Goods and Services Tax Act, 2017, cannot be invoked by the first respondent to recover the said sum as if, such sum is an arrear payable by the petitioner. The learned counsel for the petitioner further pointed out that though a statement was obtained from the petitioner on 19.06.2019, by the Superintendent of GST, stating as if the petitioner availed input credit during the period from June – 2018 to October – 2018 on the strength of invoices of fake units, the said statement was subsequently retracted by the petitioner through communication dated 26.06.2019, specifically, by stating that the petitioner’s answer is to be read as that they have so far taken ITC of Rs. 53,28,645/- for goods received along with invoices.
Perusal of Section 83 would show that the provisional attachment can be resorted to only when proceedings are pending under any of the provisions viz., Section 62, 63,64,67,73 and 74. In this case, as admitted by the learned counsel appearing for the first respondent, no such proceedings are pending as on today under any of the above provisions. Therefore, Section 83 also would not come to the rescue of the respondent to sustain the impugned proceedings.
COURT HELD
The Court held that it is seen that except issuing proceedings u/s 79, no other proceedings were ever initiated against the petitioner determining its tax liability as was sought to be recovered. Section 79 of the Act contemplates that any amount payable by a person to the Govt under any of the provisions of the Act and Rules made thereunder is not paid, the proper officer could recover the amount by one or more modes. Hence, it is evident that the term amount payable by a person is to mean that such liability arises only after determining such amount in a manner known to law. In this case, the relevant authority relied on the so-called admission made by the petitioner in its statement. Considering relevant excerpts from the petitioner’s statement, it is seen that some parts of the statement contradict each other. Besides, the statement was retracted as well. Hence such statement which purports to be an admission is not available to the Revenue.
It is also for the Revenue to determine the tax liability by resorting to procedures as per law rather than issuing the proceedings straightaway u/s 79, based on such statement later retracted. Hence the proceedings initiated u/s 79 is unsustainable. Moreover, provisional attachment u/s 83 can be resorted to only if proceedings are pending u/s 62, 63, 64, 67, 73 & 74. No proceedings are pending under any such provisions. Hence Section 83 is of no avail to the Revenue. Thus the proceedings are not maintainable and merit being set aside.
ANALYSIS OF THE JUDGEMENT
By noticing the above order, we conclude that it is the duty of the revenue to determine the tax liability by resorting to the procedures in accordance with law, instead of issuing the impugned proceedings straightaway under Section 79, which is for recovery. The first step for recovery of tax by the revenue is to determine the tax liability, and without determining the same, the revenue cannot move ahead to resorting to the provision under Section 79.
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