The Executive Officer vs. The Commissioner Of GST And Central Excise

Facts

The petitioner, the Executive Officer of T.Kallupatti Town Panchayat, a local body, filed a writ petition challenging an order of attachment of its bank account. This attachment was a consequence of the petitioner's failure to remit service tax liability, along with interest and penalty, as determined by the adjudicating authority. The adjudicating authority had passed multiple assessment orders against the petitioner for service tax due on renting of immovable properties. The total outstanding amount, including interest and penalty, was stated to be Rs. 24,44,383/-. The petitioner's bank account with the fourth respondent, Indian Overseas Bank, was frozen due to non-payment. The primary assessment orders were not under challenge in this writ petition.

Held

The Court held that it could not interfere with the consequential recovery action (attachment of the bank account) because the primary assessment orders, which determined the service tax liability, were not under challenge. The Court acknowledged that the petitioner, as a local body, might be eligible for relief concerning the penalty portion of the dues. However, it emphasized that the petitioner must first clear the service tax liability along with the applicable interest. The Court permitted the petitioner to approach the adjudicating authority with a request to pay the outstanding dues in installments, specifically suggesting a payment of Rs. 1,00,000/- per month. The adjudicating authority was directed to pass orders on this request. The petitioner was also granted liberty to challenge the primary assessment orders, with the assurance that relief would be considered for the penalty portion. Consequently, the writ petition was dismissed.

Key Issues

1. Whether the High Court can interfere with consequential recovery action (attachment of bank account) when the primary assessment orders determining the tax liability are not under challenge? Petitioner's contention: The petitioner, being a local body, sought relief against the attachment of its bank account. While not explicitly stated, the implication is that the attachment is causing undue hardship and that some form of relief or a mechanism to clear the dues should be provided. Revenue's contention: The revenue, represented by the Commissioner of GST & Central Excise and other officers, argued that since the primary assessment orders were not challenged, the consequential recovery action (attachment) was justified and could not be interfered with. They highlighted the total outstanding liability of Rs. 24,44,383/-.