M/S Skylight Man Power And Hospitality Services vs. The Commission, State Taxes And Excise And Ors

Held

The Court held that a combined reading of Sections 107(6) and 107(7) of the Act mandates that upon depositing 10% of the remaining disputed tax amount while filing an appeal, recovery proceedings for the balance amount are deemed to be stayed. The Court found that the petitioner had filed appeals for assessment years 2019-20, 2020-21, and 2021-22 and deposited the requisite pre-deposit amount as per Section 107(6). The appellate authority's order to de-freeze bank accounts but not release the attachment of debtors and immovable property was deemed contrary to Section 107(7). The Court directed that if the petitioner clears the entire amount due for assessment years 2017-18 and 2018-19 within ten days and has made the pre-deposit for assessment year 2021-22, the attachment order of immovable property and debtors shall be revoked forthwith. The ratio decidendi is that compliance with Section 107(6) triggers a stay on recovery proceedings for the balance amount under Section 107(7), necessitating the recall of attachment orders.

Facts

The petitioner, M/s Skylight Man Power and Hospitality Services, filed a writ petition challenging an attachment order concerning its debtors and immovable property. The petitioner had filed statutory appeals for assessment years 2019-20, 2020-21, and 2021-22, and made the pre-deposit as required under Section 107(6) of the Himachal Pradesh Goods and Service Tax Act, 2017. Despite this, recovery proceedings for the balance amount were not stayed, and the attached properties were not released, contrary to Section 107(7) of the Act. The respondents argued that bank accounts were de-freezed, but the property attachment was necessary to secure remaining taxes. The petitioner also undertook to deposit the balance amount for assessment year 2018-19 within ten days.

Key Issues

1. Whether the provisional attachment order of the petitioner's property under Sections 79 and 83 of the Act is liable to continue after filing statutory appeals under Section 107 of the Act, specifically considering the provisions of Section 107(6) and Section 107(7). Petitioner's Arguments: - The petitioner contended that having filed statutory appeals and made the pre-deposit as per Section 107(6), recovery proceedings for the balance amount should be deemed stayed under Section 107(7). - The petitioner argued that the attachment of property and debtors should be released as per the statutory provisions. - Reliance was placed on Section 107(6) and Section 107(7) of the Act. Respondents' Arguments: - The respondents opposed the petition, stating that while bank accounts were de-freezed, the property attachment was necessary to secure the remaining taxes. - No specific statutory provisions or precedents were cited by the respondents in the judgment.