Kesoram Industries Ltd. Vs Commissioner of Central Tax (Telangana High Court)
The Telangana High Court allowed the writ petition filed by Kesoram Industries Ltd. challenging garnishee proceedings issued in Form GST-DRC-13 to HDFC Bank Limited and Axis Bank for recovery of Rs. 1,28,97,344/- in each notice. The proceedings related to interest allegedly payable on delayed GST payments for the period July 2017 to January 2023.
The petitioner submitted that although there had been delay in payment of GST dues owing to financial crisis, it had paid the dues along with interest at 18% based on its own calculations. The petitioner disputed the interest liability calculated by the Department and requested time for payment as well as that no coercive action be taken. It contended that the garnishee proceedings under Section 79 of the CGST Act, 2017 could not be issued for a disputed liability without proceedings under Section 73 or 74 and an opportunity of hearing.
The respondents submitted that the petitioner had delayed payment of tax and was liable to pay interest. They contended that the petitioner had not paid the amounts lying in its electronic credit ledger to the Government and that the statutory procedure had been followed. Reliance was placed on Sections 39, 50, 75(12) and 79 of the CGST Act and Rules 61(2) and 88(B).
