M/S Raghbir Singh vs. State Of Haryana And Others

Held

The Court held that Section 107(7) of the Central GST Act provides for an automatic stay on recovery upon the filing of an appeal. Since the petitioner had filed an appeal during the pendency of the writ petition, the garnishee proceedings initiated for the recovery of interest were rendered invalid. Consequently, the impugned orders/notices dated July 30, 2021, and August 4, 2021, were set aside. The ratio decidendi is that the statutory provision for an automatic stay on recovery upon appeal filing supersedes any garnishee proceedings for the recovery of the disputed amount.

Facts

The petitioner, M/s Raghbir Singh Contractor, filed a writ petition challenging orders dated July 30, 2021, and August 4, 2021. These orders directed the petitioner's bank (respondent No. 3) to disburse Rs. 32,46,512/- towards interest payable under the Haryana GST Act and Central GST Act, 2017. The petitioner contended that this action was taken without observing a mandatory three-month period to allow for further action. During the pendency of the writ petition, the petitioner filed an appeal.

Key Issues

1. Whether the garnishee proceedings initiated for the recovery of interest under the Haryana GST Act and Central GST Act, 2017, are valid when an appeal has been filed by the petitioner? The petitioner argued that upon filing an appeal, Section 107(7) of the Central GST Act mandates an automatic stay on the recovery of the balance amount, thereby bringing garnishee proceedings to an end. The revenue (State of Haryana) did not dispute this contention.