V.V.S. Enterprises Vs State of Andhra Pradesh (Andhra Pradesh High Court)
No Prior Notice Needed for Bank Recovery Under GST Law Due to Final Assessment; Recovery Action Valid Without Authorization as Section 79 Does Not Require It; GST Authorities Can Recover Dues from Third Parties After Assessment Attains Finality; Writ Petition Dismissed Since Recovery Notice Followed Unchallenged Assessment Order.
The Andhra Pradesh High Court examined a writ petition challenging a notice dated 05.02.2026 issued under Section 79(1)(c) of the APGST Act, 2017. Through this notice, the respondent bank was directed to remit an amount of Rs.7,54,108 towards the petitioner’s outstanding tax dues. The petitioner, a registered dealer under the GST Act, contended that the notice was issued without initiating adjudication proceedings under Sections 73 or 74 of the Act and without obtaining prior authorization from the competent authority. It was also argued that the petitioner was not given prior notice before initiating recovery proceedings against the bank.
The Court examined the provisions of Section 79 of the APGST Act, which outlines the modes of recovery available to the authorities when tax dues remain unpaid. The section permits recovery from third parties who owe money to or hold funds on behalf of the defaulting taxpayer. Upon analysis, the Court observed that the provision does not require prior authorization before issuing such recovery notices. It further noted that Section 79 does not mandate issuing a prior notice to the defaulting dealer before initiating recovery from third parties.
