Paramjit Kaur And Ors vs. Union Of INDIA And Ors

Held

The Court held that no recovery shall be effected during the pendency of the appeal. This decision was based on the communication placed on record by the respondents, confirming that the petitioners had already filed an appeal and deposited the statutory pre-deposit amount of 7.5%. The Court found no impediment to granting the relief sought by the petitioners. Consequently, the writ petition was disposed of with a direction that any account frozen by respondent No.4 in pursuance to the notice of recovery (Annexure P-4) shall be released and made operative. The ratio decidendi is that if a taxpayer has filed an appeal and complied with the statutory pre-deposit requirements, recovery proceedings should be stayed pending the appeal's outcome. The Court did not expressly leave any issue undecided.

Facts

The petitioners, Paramjit Kaur & ors., filed a writ petition under Articles 226/227 of the Constitution of India before the Punjab and Haryana High Court. They sought a Mandamus directing respondent No.3 (Superintendent, Goods and Services Tax, Division Ferozepur) to stay a notice of recovery under Section 87-B of the Finance Act, 1994, dated 25.10.2017, for a sum of Rs.29,62,297/-. This recovery notice was issued by respondent No.4. The petitioners had filed an appeal before the Central Excise Service Tax Appellate Tribunal, Chandigarh, and also sought a direction to respondent No.4 not to transfer the disputed amount to the Government of India's account. The respondents' counsel confirmed that the petitioners had already filed an appeal and deposited the statutory pre-deposit amount of 7.5%. A letter dated 31.05.2018 from the office of the Superintendent, Goods and Services Tax, Division Ferozepur, was placed on record.

Key Issues

1. Whether the recovery proceedings initiated by respondent No.4 under Section 87-B of the Finance Act, 1994, for a sum of Rs.29,62,297/- should be stayed during the pendency of the appeal filed by the petitioners before the Central Excise Service Tax Appellate Tribunal, Chandigarh? The petitioners argued that a stay on recovery was necessary as they had already filed an appeal and deposited the mandatory pre-deposit. They sought to prevent the transfer of the disputed amount to the Government of India's account. The respondents, through their counsel, acknowledged that the petitioners had approached the Appellate Court and filed an appeal along with the required 7.5% pre-deposit. The respondents did not present any counter-argument against the stay of recovery, implicitly accepting the petitioners' submission based on the statutory compliance.