The Andhra Pradesh High Court in a significant case held that when the assessee files an appeal against an order of assessment under Central Goods and Services Tax ( CGST ) Act,2017, the enforcement actions that have been taken, such as property attachment and garnishment notices, should not continue.
SKS Traders, the assessee/petitioner suffered an order of assessment under the A.P. Goods and Services Tax Act, 2017, issued by the second respondent/Assistant Commissioner of State Tax. As the order of assessment, the assessee was declared liable to pay Rs. 2,84,10,044. To recover this amount, the Assistant Commissioner of State Tax initiated proceedings, issuing an attachment order in FORM GST DRC-22 and a garnishee notice in FORM GST DRC-13 to Branch Manager.
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The assessee subsequently approached Assistant Commissioner of State Tax with a representation, contending that they had filed an appeal against the order of assessment and had also paid 10% of the disputed tax, as required under Section 107 of the Central Goods and Services Tax Act, 2017. The assessee has challenged the attachment order and garnishee notice before the Andhra Pradesh High Court.
It was noted that the assessee has preferred an appeal and has paid 10% of the disputed tax, as required under Section 107 of the CGST Act, no further tax can be recovered from the petitioner/assessee, in pursuance of the order of assessment under appeal. The bench further concluded that continuation of the order of attachment and Garnishee while appeal was filed is clearly impermissible and against the provisions of Section 107 of the CGST Act.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
The Division Bench of Justices R Raghunandan Rao and Harinath. N observed that the assessee has preferred an appeal and has paid 10% of the disputed tax, as required under Section 107 of the CGST Act, no further tax can be recovered from the assessee, in pursuance of the order of assessment under appeal.
While allowing the appeal, the bench set aside the order of attachment and Garnishee notice.
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