Liakhat Ali Mallick vs. State Of West Bengal And Ors.

Facts

The appellant, Liakhat Ali Mallick, filed an intra-Court appeal against an order dated April 27, 2023, passed by a learned Single Bench in W.P.A. No.7453 of 2023. The appellant had challenged a garnishee notice dated February 13, 2023. The grounds for challenge were that the appellant had already paid the entire demanded tax and had filed an appeal before the appellate authority. The garnishee notice was issued before the expiry of the period for filing the appeal. The learned Single Bench had stayed the garnishee notice but imposed a condition for the appellant to deposit 20% of the interest liability, which was quantified at Rs.24,74,434/-. The order under challenge was passed by the State authorities.

Held

The Court held that the condition imposed by the learned Single Bench directing the appellant to deposit 20% of the interest amount was not justified. The Court noted that the statutory requirement for preferring an appeal, as per Section 107(7) read with Section 107(6) of the CGST Act, mandates the deposit of only 10% of the disputed tax. It was undisputed that the appellant had already paid the entire tax demanded. Therefore, imposing a condition to pay 20% of the interest liability was considered excessive and contrary to the statutory provisions. The appeal was allowed, and the portion of the learned Single Bench's order imposing the condition to pay 20% of the interest was set aside. The Court directed the appellate authority to consider the appeal filed by the appellant on its merits and in accordance with law, after providing an opportunity for a personal hearing. No issue was expressly left undecided.

Key Issues

1. Whether the condition imposed by the learned Single Bench requiring the appellant to deposit 20% of the interest liability, in addition to the tax already paid, is justified, considering the statutory requirement for preferring an appeal under Section 107(7) of the CGST Act read with Section 107(6) of the CGST Act, which mandates a deposit of 10% of the disputed tax. The appellant argued that they have already paid the entire tax demanded, amounting to Rs.63,03,920.00, as noted in an order dated December 19, 2022, passed under Section 73(9) of the W.B.G.S.T. Act, 2017. They contended that the statutory requirement for preferring an appeal is only 10% of the disputed tax, and imposing a condition to deposit 20% of the interest liability is therefore unwarranted and contrary to the law. The State's contentions were not recorded in the judgment.