Amala Traders vs. The Assistant Commissioner Of CGST And Central Excise

Facts

The petitioner, M/s. Amala Traders, filed a writ petition challenging an order dated 26.05.2025 (Form GST DRC-13) issued by the Assistant Commissioner of CGST and Central Excise, Tirunelveli. This order initiated recovery proceedings based on a prior Order-in-Original dated 14.12.2023. The petitioner had previously challenged the Order-in-Original in another writ petition (W.P.(MD) No. 18965 of 2025), which was dismissed on 14.07.2025 because the petitioner opted to settle the dispute under an Amnesty Scheme. The petitioner sought to quash the recovery proceedings and direct the Indian Bank, Choozhal Branch, to allow operation of their bank account. The bank account was placed under 'withhold' for Rs. 3,35,195/-. A sum of Rs. 1,43,192/- was transferred by Demand Draft to the first respondent.

Held

The Court held that the recovery proceedings initiated by the first respondent shall be kept in abeyance pending the proposal of the application filed under the Amnesty Scheme on 15.03.2025. The Court noted that the petitioner had already opted for the Amnesty Scheme and paid the entire tax amount on 15.03.2025. Considering this, the Court directed the first respondent to re-transfer the amount of Rs. 1,43,192/-, paid by way of Demand Draft, back to the petitioner if it had not been encashed within ten days of receiving the order. Consequently, the order of attachment freezing the petitioner's bank account was ordered to be released. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the recovery proceedings initiated by the first respondent vide order dated 26.05.2025 are liable to be quashed, given that the petitioner has opted for and paid the entire tax amount under the Amnesty Scheme on 15.03.2025? (Question of law and fact, concerning the efficacy of recovery proceedings post-settlement under Amnesty Scheme). Petitioner's contention: The petitioner argued that since they had opted for the Amnesty Scheme and paid the entire tax amount on 15.03.2025, the subsequent recovery proceedings initiated by the first respondent were illegal and arbitrary. They relied on the fact that their dispute was being settled under the Amnesty Scheme. Revenue's contention: The revenue, represented by the Assistant Commissioner, had initiated recovery proceedings. Their contention, implied by the order, was that the recovery was pursuant to the Order-in-Original dated 14.12.2023. No specific arguments were recorded for the revenue regarding the Amnesty Scheme's impact on the ongoing recovery.