HC stayed recovery as no order of assessment of tax was served upon assessee

Case Details: Sir Corporation v. Union of India - [2022] 134 taxmann.com 317 (Chhattisgarh)

Judiciary and Counsel Details

• • P. Sam Koshy, J.
  • Kshitij Sharma, Counsel, Animesh Tiwari, Dy. GA and Bhupendra Kumar Pandey, Cousel for the Appearing Parties.

Facts of the Case

The petitioner received notice under section 79(1) (c) of CGST Act, 2017 (the Act) for recovery of tax payable. It filed writ petition and contended that no order of assessment was served. It also submitted that the department didn’t issue any notice as provided under section 73 (1) of the Act nor the order of adjudication determining the GST liability was served.

High Court Held

The Honorable High Court observed that it is mandatory requirement under the Act that for initiation of recovery proceedings of tax, there has to be notice under section 73 (1) of the Act and after adjudication, the tax liability is to be determined specifying the actual tax liability, interest thereupon and also penalty for non-payment of tax within the prescribed time limitation. In the instant case, no order was served upon the petitioner as required under section 78 of the Act. Therefore, the Competent Authority was to be directed that operation of notice would remain stayed till next date of hearing subject to petitioner depositing 50 per cent of total payable tax amount within a period of three weeks after adjusting amount which was already paid.