Tvl.Amazing Adds vs. The State Tax Officer

Facts

The petitioner, Tvl.Amaxing ADDS, filed a writ petition seeking a Mandamus to direct the second respondent to refund Rs.4,70,207/-. This amount represents interest and penalty confirmed by an order dated March 16, 2024, passed by the first respondent under Section 73 of the GST enactments. The total demand raised was Rs.7,31,881/-, comprising tax (Rs.2,61,674/-), interest (Rs.2,33,571/-), and penalty (Rs.2,36,636/-). The petitioner filed an appeal before the Appellate Deputy Commissioner (ST)(GST) on June 26, 2024, with a delay of 10 days, which is within the condonable period under Section 107 of the GST enactments. Despite this, the second respondent recovered the entire amount of Rs.7,31,881/- from the petitioner's bank account on June 27, 2024, even though only 10% of the disputed tax was required to be deposited with the appeal.

Held

The Court directed the respondents to refund the amount recovered from the petitioner's bank account on June 27, 2024, as an appeal had been filed on June 26, 2024, within the condonable period of limitation under Section 107 of the TNGST Act, 2017. The Appellate Deputy Commissioner (ST)(GST), Trichy (impleaded as the third respondent), was directed to number the appeal and pass an order within 15 days on the petitioner's application for condonation of the 10-day delay. If the delay is condoned, respondents 1 and 2 are to refund Rs.4,70,207/- to the petitioner forthwith. The Court also noted that even if the delay is not condoned, the petitioner's right to seek a refund is preserved, subject to the Finance Act, 2024 being passed with the proposed Section 128A. However, the Court made it clear that it expressed no opinion on whether the petitioner would be entitled to abatement under the proposed Section 128A, as this would need to be decided independently.

Key Issues

1. Whether the recovery of the entire amount of Rs.7,31,881/- from the petitioner's bank account was justified when an appeal was filed within the condonable period of limitation under Section 107 of the GST enactments, and only 10% of the disputed tax was required to be deposited? 2. Whether the petitioner is entitled to a refund of the amount recovered, particularly in light of the proposed insertion of Section 128A in the CGST Act by the Finance (No.2) Bill, 2024? Petitioner's arguments: The petitioner contended that the recovery of the entire amount was unjustified as the appeal was filed within the condonable period of 10 days, and the proprietor was ailing, supported by a medical certificate. They also drew attention to the proposed Section 128A in the Finance (No.2) Bill, 2024, suggesting potential relief. Respondents' arguments: The respondents argued that the writ petition was devoid of merits, stating that recovery was made after the limitation for filing an appeal expired, as the 10-day delay had not been condoned.