Facts of the Case

The petitioner, M/s. Navodaya Service Center, represented by its proprietor Shri M. Shivaram, was aggrieved by an adjudication order dated 17.11.2022 passed under Section 73 of the KGST/CGST Act, 2017, and the subsequent order-in-appeal dated 27.09.2023 passed under Section 107(11) of the KGST Act rejecting its appeal. Pursuant to the confirmed appellate order, the Assistant Commissioner of Commercial Taxes (Audit) issued a recovery letter dated 12.10.2023 to initiate recovery of the confirmed dues. The petitioner also sought a direction restraining its banker, Vijaya Bank (Bank of Baroda), from recovering any sum from its account.

Issues Involved

  1. Whether recovery proceedings pursuant to a confirmed appellate order can be deferred merely because the GST Appellate Tribunal has not yet been constituted.
  2. Whether the petitioner is entitled to interim protection from recovery pending availing of further remedy.

Petitioner's Arguments

  • The GST Appellate Tribunal under Section 112 not being constituted, the petitioner had no forum to challenge the confirmed demand.
  • Recovery proceedings pursuant to the appellate order, and against the petitioner's bank account, should be kept in abeyance until the Tribunal is constituted.
  • Counsel ultimately submitted that the petition may be disposed of with liberty to file a comprehensive writ petition.

Respondent's Arguments

  • The High Court Government Pleader appeared for the Assistant Commissioner and did not concede any exemption from recovery merely on account of the Tribunal's non-constitution.
  • The dues stood confirmed both at adjudication and appellate stage, and recovery could lawfully proceed.

Court Order / Findings

  • The Court held that if the petitioner is aggrieved by the orders and wishes to ward off recovery, it must avail the appropriate remedy and cannot seek deferment of recovery proceedings merely until the GST Appellate Tribunal is constituted.
  • The petition was disposed of, subject to all just exceptions in law available to the petitioner, with liberty to file a comprehensive writ petition.

Important Clarification

  • Non-constitution of the GST Appellate Tribunal does not, by itself, entitle a taxpayer to an open-ended stay on recovery of dues confirmed at adjudication and first-appeal stage; the taxpayer must pursue an appropriate available remedy rather than seek blanket deferment from the writ court.

Sections Involved

  • Section 73, KGST/CGST Act 2017 — determination of tax not paid/short paid in non-fraud cases.
  • Section 107, KGST Act 2017 — appeal to the Appellate Authority; sub-section (11) empowers confirmation or modification of the order.
  • Section 112, CGST Act 2017 — appeal to the GST Appellate Tribunal.

Decision – In Favour of

Disposed of against the petitioner's request for blanket deferment of recovery — in favour of the Department on the specific relief sought, though the petitioner retains liberty to pursue other remedies including a fresh, comprehensive writ petition.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case No.: WP No.26284 of 2023 (T-RES)
  • CNR: Not available
  • Coram: Justice B.M. Shyam Prasad
  • Decision Date: 11-12-2023
  • Disposal Nature: Disposed of

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