M/S. Bv Traders vs. The Assistant Commissioner (St)

Facts

The petitioner, M/s. Bv Traders, represented by its Proprietor Mohamed Bilal, filed a writ petition challenging proceedings dated 21.06.2024 issued by the Assistant Commissioner (St), Dindigul Town Assessment Circle. These proceedings sought to create an encumbrance on the petitioner's immovable property, specifically directing the Sub Registrar not to allow any dealings with the property. The petitioner contended that they had no outstanding liability except for two assessment orders dated 30.11.2023. Appeals against these assessment orders had been filed with the Appellate Deputy Commissioner (Ct), GST Appeals, with the mandatory 10% deposit made, and the appeals were pending. The petitioner argued that initiating recovery proceedings and placing an embargo on their property was unjustified when no liability was payable and the appeals were pending.

Held

The Court held that the impugned proceedings dated 21.06.2024, which sought to create an encumbrance on the petitioner's immovable property, were not justified. The reasoning was that the petitioner had filed statutory appeals against the assessment orders and had complied with the mandatory requirement of depositing 10% of the disputed amount. The Court noted that when appeals are pending and the statutory pre-deposit has been made, further recovery proceedings, including placing an embargo on the assessee's property, should not be initiated. The Court found the embargo on the petitioner's property to be unjustified under these circumstances. The ratio decidendi is that coercive recovery measures are impermissible when statutory appeals are pending and the statutory pre-deposit has been made. The Court quashed the impugned proceedings. However, it also directed that if any further liability remains unrealized after the outcome of the appeal, appropriate orders in accordance with the law can be passed at that point.

Key Issues

1. Whether the impugned proceedings dated 21.06.2024, seeking to create an encumbrance on the petitioner's immovable property, were legally sustainable when statutory appeals against the underlying assessment orders were pending, and the mandatory pre-deposit had been made. Petitioner's contention: The petitioner argued that since they had filed appeals against the assessment orders and made the mandatory 10% deposit, no coercive recovery proceedings, including placing an embargo on their property, could be initiated. They asserted that there was no payable liability at that stage, making the respondents' action illegal and arbitrary. Revenue's contention: The learned Government Standing Counsel, on instructions, submitted that the appeal had been numbered as O.A.No.880 of 2026. The Court's query revealed no other liability apart from the two assessment orders. The revenue did not explicitly argue for the sustainability of the encumbrance proceedings pending appeal, but their submission confirmed the appeal's numbering.