Munna Kumar Sharma vs. State Of West Bengal And Ors.

WPA/3561/2026HC CalcuttaGSTCNR WBCHCA007016202627 April 2026Bench: HON'BLE JUSTICE RAJA BASU CHOWDHURY3 pages

AI SummaryAllowed

Facts

The petitioner, Munna Kumar Sharma, challenged a recovery made pursuant to an order dated December 4, 2025, issued under Section 107 of the WBGST/CGST Act, 2017. This order arose from an earlier order dated August 29, 2024, passed under Section 73 of the Act for the tax period April 2019 to March 2020. The petitioner argued that recovery of the demand should not have been made before the expiry of three months from the appellate order, especially since the Appellate Tribunal, though constituted, was not yet functional. The State contended that Section 78 of the Act empowered them to recover the demand even prior to the three-month period.

Held

The Court held that the recovery made by the respondents from the petitioner's bank account and electronic ledger prior to the expiry of three months from the appellate order dated December 4, 2025, was contrary to the statute. The Court noted that no reasons in writing were provided for making such recovery within the three-month period. The Court found this recovery to be an extra-judicial recovery and unsustainable under Section 78 of the Act. Consequently, the Court set aside the recovery. The respondents were directed to refund the entire amount recovered from the petitioner's bank account and credit the debited amount from the cash/credit ledger back to the petitioner's electronic ledger within three working days. The Court also observed that, considering the notification extending the time to prefer appeals to the Appellate Tribunal, recovery should ordinarily not be made until the time to file an appeal expires, in line with Section 78.

Key Issues

1. Whether the recovery of the demand made in Form GST APL 04 dated December 4, 2025, prior to the expiry of three months from the said order, is contrary to the provisions of Section 78 of the WBGST/CGST Act, 2017, and the notification dated September 17, 2025. The petitioner argued that Section 78 of the Act, read with the notification, prohibits recovery before the expiry of three months from the appellate order, particularly when the Appellate Tribunal is not functional, and thus the recovery made is illegal and should be set aside with re-crediting of the amount. The State contended that Section 78 of the Act grants them the power to recover the demand even before the three-month period expires, rendering the recovery lawful.

Sections Cited

Section 73, Section 78, Section 107, Section 112

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

7 27.04.2026 sb Ct.3. IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION APPELLATE SIDE WPA 3561 of 2026 Munna Kumar Sharma Versus The State of West Bengal & Ors. Ms. Bulbuli Basu … For the petitioner. Mr. Saptak Sanyal … For the State. 1. The present writ petition has been filed, inter alia, challenging the recovery of the demand made in Form GST APL 04 dated 4th December, 2025 passed under Section 107 of the WBGST/CGST Act, 2017 (hereinafter referred to as the “said Act’), arising out of an order dated 29th August, 2024 passed under Section 73 of the said Act, for the tax period April, 2019 to March, 2020. 2. Learned advocate for the petitioner would submit that the statute recognizes a right to the petitioner to prefer an appeal from the appellate order passed under Section 112 of the said Act before the Appellate Tribunal. In the instant case, though the Appellate Tribunal has been constituted, the same is yet to become functional. By placing before this Court the provisions of Section 112 and Section 78 of the said Act, she would submit that the respondents could not have recovered the demand raised by the respondents in Form GST APL 04 dated 4th December, 2025 prior to expiry of three months and in the instant case, prior to 30th June, 2026, having regard 2 WPA 3561 of 2026 to the notification dated 17th September, 2025. According to her, the recovery made by the respondents is contrary to the statute, the same cannot be sustained and should be set aside and the amount already recovered should be re-credited to the petitioner’s bank account and the credit/cash ledger. 3. Mr. Sanyal, learned advocate appears for the respondents. By placing before this Court Section 78 of the said Act he submits that the respondents have the power and authority to make the recovery even prior to expiry of the three month period as such there is no

irregularity in the order.

Having heard the learned advocates appearing for the respective parties and noting in the instant case the determination made by the respondents under Section 73 of the said Act has been confirmed by an order passed in APL 04 dated 4th December, 2025, ordinarily, no recovery could have been made prior to the expiry of three months from such demand. In the instant case recovery has been made from the petitioner’s bank account and from its electronic ledger within the aforesaid period of three months without the respondents providing reasons in writing why such recovery has been made. The above recovery appears to be an extra-judicial recovery and contrary to the statute. I am of the view that having regard to the provisions contained in Section 78 of the said Act, the recovery made by the respondents from the petitioner’s bank account maintained with the State Bank

WPA 3561 of 2026

of India cannot be sustained and the same is accordingly set aside.

The respondents are directed to refund the entire amount recovered from the petitioner’s bank account maintained with the State Bank of India vide Account No.36512008231 and the amount which has been debited from the petitioner’s cash/credit ledger should also be forthwith credited back to the petitioner’s electronic ledger within a period of three working days from the date of receipt of this order. Further, taking into consideration the notification S.O.4220(E)[F.No.A-50/7/2025-GSTAT- DoR] dated 17th September, 2025, since time to prefer the appeal before the Appellate Tribunal has been extended, ordinarily no recovery should be made till the time to file

the appeal expires contrary to Section 78 of the said Act.

With the above observations and directions, the writ petition is disposed of.

Urgent Photostat certified copy of this order, if applied for be given to the parties upon compliance with the requisite formalities.

(Raja Basu Chowdhury, J.)

Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.