Ms Radha Krishna vs. State Of Uttarakhand
Held
The Court held that the recovery citation dated 05.08.2025 issued by the Tehsildar under Section 79(1)(c) of the CGST Act is unsustainable in law. The Court reasoned that once a statutory appeal has been preferred in compliance with Section 107(6) of the CGST Act, the recovery of the balance demand is deemed to be stayed until the disposal of the appeal. Therefore, initiating recovery proceedings under Section 79 during the pendency of such an appeal is contrary to the established legal position. The Court quashed and set aside the impugned recovery citation. The rights and liabilities of the parties will abide by the final outcome of the statutory appeal, and liberty is reserved for parties to pursue remedies based on the appeal's result. The writ petition was disposed of accordingly.
Facts
The petitioner, M/s Radha Krishna, is challenging a recovery citation dated 05.08.2025 issued by the Tehsildar under Section 79(1)(c) of the CGST Act for recovery of ₹12,58,552/-. This amount comprised tax of ₹11,44,138/- and penalty of ₹1,14,414/-, arising from a final order dated 31.05.2023 passed under Section 73(9) of the Act. The demand notice was issued in FORM GST DRC-07 under Rule 142(5). The petitioner claims they were unaware of subsequent notices dated 04.02.2023 and 15.02.2023, preventing them from filing a reply. They filed a statutory appeal under Section 107(1) on 06.08.2025, within the limitation period, and deposited 10% of the disputed tax as pre-deposit.
Key Issues
1. Whether the recovery citation issued by the Tehsildar under Section 79(1)(c) of the CGST Act is sustainable when a statutory appeal against the demand order is pending and the mandatory pre-deposit has been made? Petitioner's contention: The petitioner argued that the recovery citation is arbitrary and contrary to law because it was issued despite the pendency of a statutory appeal filed under Section 107(1) and compliance with the mandatory pre-deposit requirement under Section 107(6). They relied on the settled legal position that recovery proceedings are stayed upon filing an appeal with pre-deposit. Revenue's contention: The State counsel admitted that the petitioner has deposited the mandatory pre-deposit while filing the statutory appeal. They also admitted that the recovery citation was issued prior to the filing of the appeal.
Sections Cited
Section 79(1)(c), Section 61, Section 73(1), Section 73(9), Rule 142(5), Section 107(1), Rule 108(1), Section 107(6), Section 107(4), Section 79
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Cause title — parties, addresses and appearances
JUDGMENT : (per Mr. G. Narendar C. J.)
Heard learned counsel for the petitioner and learned State counsel.
The brief facts, necessary for disposal of the present writ petition are that, the petitioner is a registered proprietor under the Central Goods and Services Tax Act, 2017 (“CGST Act”) carrying on business under the trade name M/s Radhe Krishna. The petitioner is aggrieved by the recovery citation dated 05.08.2025 issued by the Tehsildar under Section 79(1)(c) of the CGST Act for recovery of
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