Supreme Judicial Intervention Overturns Excessive Tax Garnishee Interest Deposit, Mandates Fair Appellate Review Under Statutory Guidelines

Tax dispute involving garnishee notice challenged by appellant. SC found lower court's condition of 20% interest deposit incorrect, as only 10% tax deposit is statutorily required. Court allowed appeal, set aside interest deposit requirement, and directed appellate authority to review appeal on merits with proper hearing.

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Issues involved: Challenge against garnishee notice, requirement of deposit for preferring an appeal, imposition of interest liability.

Challenge against garnishee notice: The appellant challenged the garnishee notice dated 13th February, 2023, on the grounds of having paid the entire tax as demanded and having already filed an appeal before the appellate authority. The appellant argued that the garnishee notice was issued before the expiry of the period for filing the appeal.

Requirement of deposit for preferring an appeal: The learned Single Bench had granted a stay on the garnishee notice but imposed a condition that the appellant must deposit 20% of the interest liability, initially quantified as Rs. 24,74,434/-. However, as per Section 107(7) of the CGST Act read with Section 107(6), the aggrieved assessee is required to deposit only 10% of the disputed tax. The appellant had already paid the entire tax amount of Rs. 63,03,920.00 as noted in the order passed under Section 73(9) of the W.B.G.S.T. Act, 2017.

Imposition of interest liability: Considering the statutory requirement mandating payment of only 10% of the disputed tax for preferring an appeal, the Court found that imposing a condition directing the appellant to pay 20% of the interest was unnecessary. The Court held that the appellant should not be required to pay 20% of the interest amount and directed the appellate authority to consider the appeal on its merits and in accordance with the law after providing an opportunity for a personal hearing.

Conclusion: The appeal was allowed, and the portion of the order directing the appellant to pay 20% of the interest amount was set aside. The appellate authority was instructed to review the appeal filed by the appellant in line with the law and after granting a personal hearing. No costs were awarded, and the parties were to receive a certified copy of the order upon fulfilling the legal formalities.

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