Vishesh Industries Vs State of U.P. and Another (Allahabad High Court)
In the case of Vishesh Industries vs. State of U.P. and Another, the Allahabad High Court addressed the premature recovery of a disputed tax amount by the tax department. The petitioner’s counsel, Mr. Ravindra Kumar Rastogi, argued that the department had recovered the full amount even before the three-month limitation period for filing an appeal had expired. The court found the department’s action to be without a legal basis and arbitrary, noting that the recovery was initiated just one month after the appeal under Section 107 of the U.P. GST Act, 2017, was dismissed. This action was deemed to violate established legal principles.
The Allahabad High Court issued a directive to resolve the matter. The court ordered the tax department to deduct only 10% of the disputed tax amount, as this is the legal requirement for a pre-deposit pending further appeal. The department was instructed to refund the remaining 90% of the recovered amount to the petitioner. The court’s decision effectively disposed of the writ petition, highlighting its stance against the department’s premature and unauthorized recovery of the full tax amount. This ruling reinforces the principle that taxpayers are entitled to legal procedural timelines before a disputed amount can be fully recovered.
