Interim Stay on GST Recovery Granted After 10% Deposit and Bank Account Deduction Exceeding 20% Appeal Requirement

HC stayed recovery proceedings under Section 79 of CGST/SGST Act against petitioner who faced tax liability of Rs. 2,47,58,078. Petitioner had appealed under Section 107 after depositing 10% of disputed amount, but appeal was dismissed in absentia. Subsequently, Rs. 34,99,000 was recovered from petitioner's bank account. Court acknowledged petitioner's right to appeal before Appellate Tribunal (not currently functioning in Chhattisgarh) and that recovery exceeded the 20% mandatory deposit requirement for tribunal appeals, thus granting interim stay pending further hearing.

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Issues Involved:
1. Scrutiny proceeding under CGST/SGST Act initiated against petitioner.
2. Imposition of total liability on petitioner including tax, interest, and penalty.
3. Appeal process under Section 107 of CGST/SGST Act.
4. Requirement of mandatory deposit for maintaining an appeal before Tribunal.
5. Recovery of amount from petitioner's bank account.
6. Petitioner's plea for stay of recovery and hearing of writ petition on merits.

Analysis:
1. The petitioner is challenging the scrutiny proceeding initiated under the CGST/SGST Act, where a total liability of Rs. 2,47,58,078 has been imposed, including tax, interest, and penalty. The petitioner appealed under Section 107 of the Act, with a mandatory deposit of 10% of the disputed tax component. The appeal was admitted and decided in the absence of the petitioner based on available documents and records.

2. The Respondent authorities issued a notice under Section 79 of the CGST/SGST Act after the dismissal of the first appeal. Before filing the writ petition, an amount of Rs. 34,99,000 was recovered from the petitioner's bank account. The petitioner contends that the recovery exceeds the mandatory deposit required for maintaining an appeal before the Tribunal.

3. The Respondent State Counsel argues that the petitioner has short-paid the tax liability, justifying the imposition of interest and penalty. Proper opportunities were provided to the petitioner before the First Appellate Authority. The appeal was decided based on the material available as the petitioner failed to appear despite multiple adjournments.

4. The petitioner's counsel highlights the mandatory deposit requirement of 20% of the disputed tax component for filing an appeal before the Tribunal. The petitioner had already deposited a portion of the amount, and the recovery made by the department has surpassed the total mandatory deposit, raising concerns about the excess recovery.

5. The UCO Bank, as the Respondent No.6, confirms the preparation of a Demand Draft based on the demand from the Commissioner of the GST Department under DRC-13. The recovery process from the petitioner's bank account is substantiated by the documents placed on record.

6. The Court, after considering the facts and circumstances, acknowledges the petitioner's remedy of filing a statutory appeal before the Appellate Tribunal under the CGST/SGST Act, which is not currently functioning in the State of Chhattisgarh. The Court directs a stay on the operation of the notice issued by the respondent-department under Section 79 until the next hearing date, allowing time for further submissions and listing the case for the following week.

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