Shivam Metallurgicals Private Limited vs. Assistant Commissioner

Facts

The petitioner, Shivam Metallurgicals Private Limited, filed a writ petition challenging the recovery of SGST amounting to Rs. 2,87,914/- from its Electronic Credit Ledger. This recovery was made by the Assistant Commissioner, State Tax, Raipur, pursuant to an assessment order dated February 25, 2025, which demanded Rs. 10,32,672/- from the petitioner. The petitioner was granted 30 days to pay the demand, but failed to do so. The revenue contended that Section 79(1)(a) of the CGST Act, 2017, empowered the proper officer to recover the amount from any money owing to the person. The petitioner had filed a rectification application, which was rejected, and subsequently filed an appeal against the assessment order. The recovery from the Electronic Credit Ledger occurred before the appeal was filed.

Held

The Court held that Section 79(1)(a) of the Central Goods and Services Tax Act, 2017, empowers the proper officer to recover any amount payable by a person to the Government from any money owing to such person. In this case, an assessment order dated February 25, 2025, demanded Rs. 10,32,672/- from the petitioner, granting 30 days for payment. As the petitioner failed to pay within the stipulated period, the Assistant Commissioner recovered Rs. 2,87,914/- from the petitioner's Electronic Credit Ledger under the authority of Section 79(1)(a). The Court noted that the petitioner's rectification application was rejected on August 6, 2025, and an appeal against the assessment order was filed on August 14, 2025. The recovery from the Electronic Credit Ledger occurred on June 19, 2025, which was prior to the filing of the appeal. Since no stay order was obtained by the petitioner after the rejection of the rectification application, the Court found the recovery from the Electronic Credit Ledger to be neither perverse nor illegal. Therefore, the Court found no good ground to admit the writ petition.

Key Issues

1. Whether the recovery of Rs. 2,87,914/- from the petitioner's Electronic Credit Ledger by the Assistant Commissioner, State Tax, Raipur, was without authority of law and in violation of principles of natural justice, as contended by the petitioner under Article 226/227 of the Constitution of India. 2. Whether the action of the respondent No. 1 in recovering the amount from the Electronic Credit Ledger was in accordance with Section 79(1)(a) of the Central Goods and Services Tax Act, 2017, as argued by the State/respondents. Petitioner's Arguments: The petitioner argued that the recovery was without authority of law, bad in law, and in violation of fundamental rights and principles of natural justice. They sought quashing of the recovery and refund of the amount with interest. Revenue's Arguments: The State/respondents argued that Section 79(1)(a) of the CGST Act, 2017, entitled the Assistant Commissioner to recover the amount payable by the petitioner from any money owing to him. They asserted that since the petitioner failed to deposit the assessed amount of Rs. 10,32,672/- after the assessment order, the recovery of Rs. 2,87,914/- from the Electronic Credit Ledger was justified. They also noted that the petitioner's rectification application was rejected and an appeal was filed after the recovery.