The Calcutta High Court quashes an order of the Single Bench of the Calcutta High Court directing to remit 20% of disputed tax in contravention of Section 107(7) of the Central Goods and Services Tax (CGST) Act, 2017.
The appellant, Liakhat Ali Mallick, challenged the garnishee notice on the ground that the appellant has paid the entire tax as demanded and has also preferred an appeal before the appellate authority and before the expiry of the period for filing the appeal, the garnishee notice was issued.
The Single Bench has granted stay of the garnishee notice but has imposed a condition that the appellant has to deposit 20% of the interest liability, which was originally quantified as Rs.31,58,936/-, subsequently rectified as Rs.29,85,527/-.
In terms of Section 107(7) of the CGST Act read with Section 107(6) for preferring an appeal, the aggrieved assessee is required to deposit 10% of the disputed tax.
It is not in dispute that the appellant has paid the entire tax, which has been noted in the order passed under Section 73(9) of the W.B.G.S.T. Act, 2017, which shows that the appellant/petitioner has paid the tax of Rs.74,69,348.00.
A Division Bench comprising Justice TS Sivagnanam and Justice Uday Kumar observed that “Considering the facts and circumstances of the case and also the statutory requirement, which mandates payment of only 10% of the disputed tax, we are of the view that a condition need not be imposed by directing the appellant/petitioner to pay 20% of the interest.” “Accordingly, the appeal is allowed and that portion of the order passed by the Single Bench directing the appellant to pay 20% of the interest amount is set aside and direction is issued to the appellate authority to consider the appeal filed by the appellant on merits and in accordance with law after affording an opportunity of personal hearing” the Bench concluded.
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