Tvl. GRB Dairy Foods Pvt Ltd. Vs State of Tax Officer (Madras High Court)
Madras High Court has intervened in a dispute concerning premature recovery proceedings initiated by the State Tax Officer against Tvl. GRB Dairy Foods Pvt. Ltd. The court, hearing writ petitions filed by the company, noted that the Revenue itself had deferred the recovery action, rendering further judicial intervention unnecessary.
The case involved demand notices issued on October 10, 2019, for the assessment years 2017-18, 2018-19, and 2019-20. These notices were issued immediately after assessment orders were passed on October 1, 2019, and reportedly served on the petitioner by October 3, 2019. The demand called for proof of payment of tax, interest, and penalty by October 21, 2019, threatening recovery proceedings under Section 79 of the GST Act, 2017, for non-compliance.
Mr. A.L. Somayaji, learned Senior Counsel for the petitioner, argued that the demand notice, issued within 10 days of the assessment order, was unsustainable. He emphasized that the petitioner had a statutory period of three months to file an appeal against the assessment orders before the Appellate Authority, as per Section 107 of the Central Goods and Services Tax Act, 2017. Section 107(6) further stipulates that an appellant, while filing an appeal, must pay the admitted tax, interest, and penalty in full, along with 10% of the disputed tax amount, which automatically stays recovery for the balance as per Section 107(7). Issuing a demand notice before the expiry of this appeal period, he contended, was prejudicial to the petitioner’s interests.
