Case Law Details
Jey Tech Moulds Dies Vs Deputy Commissioner (GST)-II (Madras High Court)
Introduction: This article delves into a recent judgment by the Madras High Court regarding Jey Tech Moulds Dies’ plea to de-freeze its bank account. The petitioner filed a GST appeal and deposited 10% of the outstanding demand, seeking relief from the court.
Detailed Analysis: Jey Tech Moulds Dies approached the Madras High Court through a Writ Petition, urging the court to direct the respondent (Deputy Commissioner GST-II) to consider their representation dated 18.10.2023. The petitioner highlighted that while they filed their GST, the supplier failed to pay the GST, leading to action by the respondents, including freezing the petitioner’s bank account.
The petitioner, in its representation, committed to depositing the pending Input Tax Credit (ITC) and appealed the freezing of their bank account. The court considered the petitioner’s appeal before the Appellate Authority, where a sum of Rs.83,000/- was paid for the acceptance of the appeal. However, the bank account remained frozen.
The legal position under Section 107 of the Goods and Services Tax Act, 2017, was crucial in the court’s decision. As per this provision, if the petitioner pays 10% of the outstanding tax dues along with the penalty, the proceedings against them should be automatically stayed. The court observed that since the petitioner had paid Rs.83,000/-, the respondent was obligated to de-freeze the bank account.
Conclusion: The Madras High Court, in its directive, instructed the respondents to consider the petitioner’s representation and de-freeze their bank account upon proof of depositing Rs.83,000/- or 10% of the total demand made by the respondent. The court emphasized the legal provision under Section 107 of the GST Act, highlighting the importance of compliance in such matters. This ruling sets a precedent for similar cases where taxpayers seek relief while appealing against GST demands. The article concludes with the specifics of the court’s direction and the potential impact on businesses facing similar challenges.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Writ Petition has been filed to direct the respondent to consider the representation of the petitioner dated 18.10.2023.
2. Mr. T.N.C.Kaushik, learned Additional Government Pleader takes notice on behalf of the respondents. By consent of the parties, the main writ petition is taken up for disposal at the admission stage itself.
3. According to the petitioner, the petitioner had filed his GST However, the supplier of the petitioner had failed to make the payment of GST. Since the supplier had failed to make the deposit, the respondents had proceeded against the petitioner and passed an order. Further, the respondents had also freezed the bank account of the petitioner. Therefore, the petitioner made a representation dated 18.10.2023 to de-freeze their bank account, wherein they had undertook to deposit the pending ITC to the respondents.
4. The learned counsel for the petitioner would also submit that the petitioner had filed an appeal before the Appellate Authority, whereby, they had paid a sum of Rs.83,000/- for accepting the appeal, which is yet to be numbered by the respondent.
5. Heard the learned counsel for the petitioner and the respondents and also perused the materials available on record.
6. Considering the submissions, it appears that the respondent directed the petitioner to pay a sum of Rs.4,34,522/-. According to the provision of Section 107 of Goods and Services Tax Act, 2017, (hereinafter called as “GST Act”), if the petitioner paid 10% of the outstanding tax dues along with penalty, the respondent proceedings will be automatically stayed. The said legal position was also confirmed by the learned counsel for the respondents. In such view of the matter, in the present case, since the petitioner had paid a sum of Rs.83,000/-, the respondent is supposed to have de-freeze the bank account of the petitioner as per Section 107 of the Act.
7. In view of the above, the respondents are directed to consider the representation of the petitioner dated 18.10.2023 and de-freeze the petitioner’s bank account, upon the production of proof of deposit of 83,000/- or 10% of the total demand made by the respondent. The said exercise shall be completed within a period of one week from the date of receipt of copy of this order.
8. With the about direction, this Writ Petition is disposed No cost.
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