Facts of the Case

The petitioner challenged the recovery proceedings initiated by the respondent through Form GST DRC-16 dated 20.11.2021, whereby the petitioner's immovable properties were attached for recovery of GST dues under Section 79 of the CGST Act, 2017.

Earlier, the petitioner had challenged the assessment orders for the assessment years 2017-18, 2018-19 and 2019-20. The Single Judge had conditionally quashed the assessment orders upon payment of specified amounts and remanded the matter to the adjudicating authority for fresh consideration after granting an opportunity of hearing.

Instead of complying with the conditional order, the petitioner preferred writ appeals, which were dismissed. Thereafter, miscellaneous petitions were also disposed of, granting liberty to approach the adjudicating authority.

Despite the remand, the respondent initiated recovery proceedings under Section 79 by issuing Form GST DRC-16 for attachment of immovable properties. The petitioner challenged these proceedings before the High Court.

 Issues Involved

  1. Whether recovery proceedings under Section 79 of the CGST Act through Form GST DRC-16 could be quashed after the assessment matter had already been remanded.
  2. Whether attachment proceedings initiated during the pendency of remand proceedings were liable to be interfered with under Article 226 of the Constitution.
  3. Whether the writ petition challenging Form GST DRC-16 was maintainable despite considerable delay.

 Petitioner's Arguments

  • The petitioner contended that the respondent had issued Form GST DRC-16 attaching immovable properties despite the earlier orders of the High Court remanding the assessment proceedings.
  • It was argued that the respondent failed to comply with the directions issued by the High Court and instead proceeded with coercive recovery measures.
  • The petitioner submitted that representations had already been filed objecting to the attachment proceedings, but the respondent continued with recovery action.
  • Accordingly, the petitioner sought quashing of the attachment proceedings initiated under Section 79 of the CGST Act.

 Respondent's Arguments

  • The respondent submitted that the writ petition had been filed belatedly against Form GST DRC-16.
  • It was argued that the recovery proceedings merely attached immovable properties and the petitioner had been given sufficient opportunity to participate in the adjudication proceedings.
  • The respondent contended that the petitioner was attempting to prolong the litigation despite having substantial outstanding tax liabilities.
  • It was further submitted that the petitioner should participate in the remanded proceedings instead of challenging recovery proceedings independently.

 Court Order / Findings

The Madras High Court held that the writ petition challenging Form GST DRC-16 was liable to be dismissed on account of delay.

The Court observed that once the assessment proceedings had already been remanded for fresh adjudication, it was not open to the petitioner to seek quashing of the recovery proceedings separately.

The Court further noted that the petitioner ought to participate in the proceedings before the adjudicating authority pursuant to the notice issued on 14.02.2022.

Accordingly, the respondent was directed to complete the adjudication proceedings within three months from the date of receipt of the order.

The Court also clarified that any further proceedings relating to the sale of immovable property or attachment of bank accounts would remain subject to the final outcome of the remanded adjudication proceedings.

The writ petition was disposed of with the above observations.

 Important Clarification

  • A challenge to Form GST DRC-16 after substantial delay may not be entertained by the High Court.
  • Once assessment proceedings have been remanded, taxpayers are expected to participate in the fresh adjudication instead of separately challenging consequential recovery proceedings.
  • Attachment proceedings initiated under Section 79 of the CGST Act remain subject to the final outcome of the adjudication where the assessment itself has been remanded.
  • Courts generally discourage repeated litigation when effective remedies remain available before the adjudicating authority.

Sections Involved

  • Section 79 of the Central Goods and Services Tax Act, 2017
  • Article 226 of the Constitution of India
  • Form GST DRC-16 (Recovery by Attachment and Sale of Immovable Property)

 Link to Download the Order-https://mytaxexpert.co.in/uploads/1783922095_4009compressed.pdf

 Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.