• Notification Date: 22-01-2024
• Notification No: N/A

Patna High Court charges Rs 5k Penalty on GST Officer for Illegal Recovery

The Patna high court has slapped a cost of Rs 5,000 on a Goods and Services Tax (GST) officer for “forcible and illegal recovery” of cent per cent tax amount from a person waiting to avail the statutory remedy of appeal before GST tribunal which has not been made functional in Bihar. 

A division bench of Chief Justice K Vinod Chandran and Justice Rajiv Roy passed the order on Thursday while allowing the writ application filed by National Insurance Company, Patna regional office. The court directed the state commercial taxes department to make a refund of the entire tax amount recovered forcefully within two weeks. 

Due to the absence of a GST tribunal in Bihar, the aggrieved assessees, through judicial orders, have been given liberty by the high court to pay 20% of the total assessed amount as a bonafide gesture of preferring appeal before the GST tribunal which would be pressed no sooner the tribunal starts functioning. 

Petitioner’s counsel submitted to the court that the assistant commissioner of Patliputra circle of commercial taxes department passed an assessment order of Rs 52 crore on February 17, 2022. A first appeal was preferred against excess assessment before the appellate authority. The appeal was, however, dismissed September 21, 2022. Since the forum of the GST appellate tribunal is not available, the petitioner company deposited 20% of the assessed amount, as provided by the GST law, for contemplating an appeal before GST tribunal once it starts functioning in Bihar. 

Although the said statutory deposit of 20% of tax amount was accepted by the department, a new demand notice was issued for recovery of the entire balance of assessed amount in January last year. 

The counsel told the court that when his client preferred this writ application against a fresh demand notice, the department, in retaliation, recovered the entire balance amount of about Rs 42 crore by threatening to take coercive steps.