Tvl. R. Selvarathinam Vs Deputy State Tax Office -II (Madras High Court)
Summary: The Madras High Court, in the case of Tvl. R. Selvarathinam v. Deputy State Tax Officer-II, ruled that recovery proceedings cannot be initiated while an appeal against an assessment order is pending. The petitioner challenged the order dated April 30, 2024, issued under Section 73 of the Tamil Nadu GST Act, 2017, seeking to restrain the revenue department from recovering the assessed tax, including interest and penalties, from the petitioner’s bank account. Despite responding to a show cause notice issued in August 2023, the petitioner’s replies were allegedly not considered before the order was passed. Subsequently, the department initiated recovery proceedings in August 2024, prompting the petitioner to file a writ petition. The petitioner argued that an appeal against the order was filed on August 28, 2024, and should have stayed any recovery actions. The court held that the petitioner must pursue the appeal before the Appellate Authority as per the legal framework. However, acknowledging the ongoing recovery actions, the court directed the department to defer all recovery proceedings until the appeal is resolved. The judgment aligns with Section 107(7) of the TNGST Act, which states that recovery proceedings must be stayed when the appellant has deposited the required pre-deposit at the time of filing the appeal. The ruling reinforces procedural safeguards for taxpayers, ensuring that recovery actions do not proceed prematurely while appeals remain undecided.
