M/S Jai Veer Bhadreshwar Construction vs. Assistant Commissioner A E Central Goods And Services Tax

Facts

The petitioner, aggrieved by two letters dated 19.10.2022 and 07.12.2022 issued by the Assistant Commissioner (A.E.), Central Goods and Services Tax Commissionerate, Dehradun, challenging the request to withhold payments due to him. These letters directed the Executive Engineer, Irrigation Division 2 PWD PMGSY PIU-2, Tehri Garhwal, to keep payments to the petitioner on hold until his tax liability is satisfied. The petitioner stated that over ₹3,00,00,000/- (Three Crores) was payable to him for civil works completed under Pradhan Mantri Gram Sadak Yojana, but the entire payment was withheld due to his GST dues. The petitioner's GST liability was stated to be approximately ₹97,00,000/- (Ninety-Seven Lakhs).

Held

The Court disposed of the writ petition by permitting the petitioner to file a reply to the show cause notice dated 07.12.2022, along with all requisite documents, within ten days. The Court directed that if the petitioner submits a reply with supporting documents, the Competent Authority, i.e., the Assistant Commissioner (A.E.), Central Goods and Services Tax Commissionerate, Dehradun, shall consider the reply and pass a decision in accordance with the law within six weeks thereafter. Once the petitioner's tax liability is assessed, the Competent Authority, CGST, shall issue a fresh notice to the petitioner. The petitioner may then move an application under the appropriate provision of the CGST Act, which, if filed, shall be decided within two weeks from the date of its receipt. The Court did not explicitly decide on the propriety of withholding the entire payment or the applicability of Section 80 at this stage, but provided a procedural path for resolution.

Key Issues

1. Whether the withholding of the entire payment due to the petitioner, amounting to over ₹3 Crores, is justified on account of his GST liability, which the petitioner claims is approximately ₹97 Lakhs? 2. Whether the petitioner should be permitted to move an application under Section 80 of the CGST Act for payment of tax in installments, and if so, should the Commissioner be directed to decide such an application? Petitioner's Contentions: The petitioner argued that withholding the entire payment was unjust given the substantial amount due to him and his GST liability. He relied on Section 80 of the CGST Act, which allows taxpayers to apply for payment of tax in installments, not exceeding 24 months, and prayed that he be permitted to move such an application before the Commissioner, CGST, who should be directed to decide it. Revenue's Contentions: The Revenue submitted that a show cause notice was issued to the petitioner in August 2022, with a reminder on 07.12.2022. Perusal of the notice revealed the petitioner's total tax liability towards GST on work contracts to be ₹11,04,62,140/-. The Revenue contended that it would not be possible for the Competent Authority to decide the petitioner's tax liability unless he participated in the proceedings initiated by the show cause notice, and therefore, the question of invoking Section 80 of the CGST Act did not arise.