Shree Gajanan Industries vs. The Assistant Commissioner

Held

The Court noted that the petitioner was inclined to avail the remedy of appeal under Section 172 of the Act before the learned Appellate Tribunal against the order-in-appeal and claimed to have made the pre-deposit. Consequently, the Court granted the petitioner liberty to approach Respondent No. 1 (Assistant Commissioner) for a stay of the impugned recovery proceedings. The petitioner was also directed to approach the learned Appellate Tribunal by filing an appeal within the window period prescribed under the order dated 24.09.2025 against the impugned order-in-appeal. The Court further directed that if the petitioner satisfied Respondent No. 1 that the statutory pre-deposit had been made for preferring the appeal before the Appellate Tribunal, Respondent No. 1 shall take a decision on the stay of recovery proceedings within a period of two weeks thereafter. The writ petition was disposed of accordingly, with no order as to costs.

Facts

The petitioner, Shree Gajanan Industries, filed a writ petition challenging a garnishee notice dated 14.10.2025 issued by the Assistant Commissioner (Central Tax) under Section 79(1)(c) of the Central Goods and Service Tax Act, 2017. This notice directed the petitioner's banker, Central Bank of India, Nizamabad, to maintain a lien on the petitioner's account for the recovery of tax amounting to Rs. 64,45,020/-. The recovery was based on an order-in-original dated 01.11.2023 for the period July 2017 to March 2020, which was affirmed by an order-in-appeal dated 10.05.2014. The petitioner stated that 10% of the tax dues had been deposited as pre-deposit for filing an appeal by February 2025. The petitioner also indicated a willingness to approach the Goods and Services Tax Appellate Tribunal, which had not yet started functioning.

Key Issues

1. Whether the garnishee notice dated 14.10.2025 issued under Section 79(1)(c) of the Central Goods and Service Tax Act, 2017, is illegal, arbitrary, unconstitutional, and contrary to the order dated 24.09.2025 of the Department of Revenue, Ministry of Finance, thereby warranting its setting aside. Petitioner's contention: The petitioner argued that despite depositing 10% of the tax dues as a pre-deposit for filing an appeal by February 2025, the respondent issued a garnishee notice to its banker. The petitioner also expressed an intention to approach the Goods and Services Tax Appellate Tribunal, which was not yet operational. Respondents' contention: The respondents, through the Senior Standing Counsel for CBIC, drew the Court's attention to an order dated 24.09.2025 issued by the Appellate Tribunal. This order prescribed a window period for filing appeals against orders issued on or after 01.02.2024 but on or before 31.05.2024, commencing from 01.01.2026 and ending on 31.01.2026, or later, but not beyond 30.06.2026. It was submitted that the Appellate Tribunal had commenced entertaining appeals, and therefore, the petitioner should approach the Tribunal with the statutory pre-deposit. If the pre-deposit was made, the petitioner should approach the respondent for a stay of recovery proceedings.