The Tax Publishers

GST--Recovery Proceedings

Assessee Deposited 10% of Disputed Tax During Appeal--Validity of Garnishee Notice for Recovery of Tax

Purnendu Sahai

The learned author tries to make an analytical study of the issue as to whether where the taxpayer has deposited 10% of the disputed tax amount during the pendency of appeal, issuance of Garnishee proceeding for recovery of tax is sustainable in law.

1. Introduction

Section 78 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") dealing with 'Initiation of Recovery Proceedings' provides that any amount payable by a taxable person in pursuance of an order passed under the Act shall be paid by such person within a period of three months from the date of service of such order failing which recovery proceedings shall be initiated.

Section 79 of the CGST Act deals with recovery of tax. Various modes of the recovery of the amount payable under the Act are prescribed under the above section. One of the modes of recovery of tax is recovery by a garnishee order as contemplated under clause (c) of sub-section (1) of section 79, which provides that the proper officer may serve a notice in Form GST DRC-13 requiring any other person from whom money is due or may become due to such person or who holds or may subsequently hold money for or on account of such person to pay to the Government either forthwith upon the money becoming due or being held, or within the time specified in the notice not being before the money becomes due or is held so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount.

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