Smm Infratech Private Limited Vs State of U.P (Allahabad High Court)
In Smm Infratech Private Limited vs State of U.P., the Allahabad High Court addressed a writ petition filed under Article 226 of the Constitution of India challenging recovery actions initiated under Sections 62 and 79 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner sought quashing of recovery orders, withdrawal of liens on bank accounts, and a declaration that no amount was legally payable at the time of recovery. The petitioner contended that all requisite returns were filed and taxes paid, relying on GSTR-3B filings, and claimed that certain assessment orders under Section 62(1) had been statutorily withdrawn under Section 62(2).
The undisputed facts revealed a delay in filing returns and payment of taxes, which were subsequently rectified by the petitioner, in some cases within 60 days. Despite this, the State created liens on the petitioner’s bank accounts in July and September 2025, more than a year after tax dues had been paid. The petitioner argued that these actions violated Sections 62(2) and 79 of the Act.
The Court observed that the liens were imposed long after the dues were cleared and noted that the deeming provisions under Section 62(2) should have led to the withdrawal of further demands. The Court described the lien as excessively harsh and directed the Department to cancel the lien instructions, ordering the bank to immediately de-freeze the petitioner’s accounts. However, the Court clarified that if any other demands, including interest or penalties, are pending, the Department may issue fresh show-cause notices and proceed in accordance with law.
