Notice u/s 79 APGST Act valid without Prior Hearing: Andhra Pradesh HC dismisses Petition Against Recovery from Bank Account [Read Order]

The Andhra Pradesh High Court dismissed a writ petition challenging a recovery notice issued under Section 79(1)(c) of the Andhra Pradesh Goods and ServicesTax Act (A.P. GST Act), 2017, directing a bank to pay the tax dues of a registered dealer. The bench ruled that Section 79 does not require the officer to obtain specific authorisation before issuing such a notice and confirmed that the notice was issued by the "proper officer" as designated by the Gazette notification.

The petition was filed by V.V.S. Enterprises, represented by its Managing Partner, Sri Kottada Sankara Rao, challenging a notice dated February 5, 2026. The notice, issued by the Assistant Commissioner (ST), Airport Circle, Visakhapatnam, directed the ICICI Bank branch manager to remit a sum of Rs. 7,54,108/- from the petitioner's account to cover tax, interest, and penalty arrears.

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The petitioner argued that the notice was illegal as it was issued without following due process, without a prior notice to the petitioner, and without obtaining authorisation from the competent authority. The counsel relied on judgments from the High Courts of Karnataka and Bombay to argue that recovery proceedings cannot be initiated without adjudication of the disputed tax.

The bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar noted that the respondent authorities had already passed an Assessment Order on January 17, 2025, against the petitioner determining the tax demand, and that this order had attained finality as it remained unchallenged. The Court observed that the recovery was initiated merely because the petitioner failed to pay the dues despite the lapse of one year.

Regarding the petitioner's contention that a prior notice was required before initiating recovery under Section 79, the Court held that it does not impede the provision requiring the tax authorities to issue a separate notice to the defaulter before recovering dues from third parties, such as banks.

The Court distinguished the judgments cited by the petitioner, noting that in those cases, the recovery notices were quashed because the tax liability itself was under dispute and had not been adjudicated. In the present case, since the tax liability was already determined by the final assessment order, the authorities were justified in invoking Section 79 for recovery.

The Court further observed that Section 79 does not require the officer to obtain specific authorisation before issuing such a notice and confirmed that the notice was issued by the "proper officer" as designated by the Gazette notification.

The Court held that no illegality existed in the issuance of the impugned notice for the recovery of confirmed tax arrears and dismissed the writ petition. The pending applications were also closed.

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