The Tax Publishers

GST--Recovery of Tax

Assessee Deposited 10% of Disputed Tax--Validity of Issuance of Garnished Notice of Recovery of Tax

Purnendu Sahai

The learned author seeks to make an analytical study of the issue as to whether where a taxable person makes pre-deposit of 10% of the demand at the time of filing appeal to the Appellate Authority, initiation of Garnishee proceeding for recovery of the pending demand is sustainable. The issue under consideration is being discussed in the light of the statutory provisions and the Jharkhand High Court decision in the case of Sri Ram Construction v. UOI, W.P. (T) No. 3402 of 2020, decided on 9-6-2022.

1. Relevant statutory provisions

Section 107 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act"), deals with appeals to Appellate Authority. As per sub-section (1) of section 107 of CGST Act, any person aggrieved by any decision or order passed under the Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.

In terms of sub-section (6) of section 107 of the CGST Act, no appeal shall be filed under sub-section (1), unless the appellant has paid--

(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and

(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed.

Where the appeal is proposed to be filed against an order sub-section (3) of section 129, the appellant is required to pay a sum equal to twenty-five per cent. of the penalty.

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