In a ruling delivered on Thursday, the Calcutta High Court has held that the action of the GST department recovering the tax demand from the electronic cash ledger before the expiry of statutory time to file the appeal is a clear violation of the provisions of section 78 of the Central GST Act, 2017.
The petitioner, Purulia Metal Casting Pvt. Ltd has challenged the action of recovery of the demand arising out of the adjudication order dated 14th December 2021 by debiting from its electronic credit ledger such demand on 1st February 2022 in violation of Section 78 of the WBGST Act, 2017 without giving any opportunity to the petitioner three months’ time to file the statutory appeal which is mandatory before initiating any recovery proceeding.
Justice Md. Nizamuddin held that “Admitted position of fact is that the adjudication order was passed on 14th December 2021 while just within 49 days i.e. on 1st February 2022 respondent authorities concerned have recovered the demand in question which is a clear violation of the aforesaid provision of Section 78 of the Act.”
Allowing the petition, the Court directed the authorities concerned “to refund the money which it has collected in excess 10% of the demand in question which is required to be deposited as a pre-deposit for filing of appeal against the impugned adjudication order, within 15 days from the date on condition that petitioner will file the appeal against the impugned adjudication order within 15 days from the date and if such appeal is filed by the petitioner within the time stipulated herein, the appellate authority concerned will consider the issue of limitation by taking a lenient view. In case the petitioner fails to file the appeal within the time stipulated herein, respondent authorities concerned will be free to take action in the future for realizing the demand in question again. Liberty is given to the petitioner to file an appeal offline since the time to file the appeal online has already expired.”
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