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of <h1>Tax authorities must refund coercively recovered amounts within two weeks or pay 12% annual interest</h1> <h3>National Insurance Co. Ltd. Versus The State of Bihar, The Additional Commissioner of State Taxes (Appeal) Patna., The Assistant Commissioner of State Taxes, Patliputra Circle, Patna, Sanjay Kumar Mishra, Assistant Commissioner of State Taxes, Patliputra</h3> National Insurance Co. Ltd. Versus The State of Bihar, The Additional Commissioner of State Taxes (Appeal) Patna., The Assistant Commissioner of State ... Issues involved:The judgment addresses the issue of recovery proceedings initiated by tax authorities without a constituted Appellate Tribunal as mandated by the Bihar Goods and Services Tax Act. It also examines the validity of recovery actions taken against a public sector undertaking despite payment of 20% of the tax in dispute after the first appeal was rejected.Issue 1: Appellate Tribunal ConstitutionThe judgment notes that on 21.09.2022, an appeal filed by the assessee/petitioner against the assessment order was rejected due to the absence of an Appellate Tribunal as required by Section 109 of the Bihar Goods and Services Tax Act. Despite the payment of 20% of the tax in dispute post-rejection, a demand was issued on 05.01.2023, leading to coercive action by tax authorities.Issue 2: Recovery ProceedingsThe Court criticizes the recovery actions taken by tax authorities when 20% of the tax was paid after the first appeal was rejected, emphasizing that without a constituted Tribunal, no further recovery proceedings should have been initiated. The judgment cites a previous case where recovery under similar circumstances was disapproved.Issue 3: Legal Provisions and Natural JusticeThe judgment delves into legal provisions such as Section 112 of the Central Goods and Services Tax Act, emphasizing the mandatory payment requirements for instituting an appeal. It also discusses the proviso to Section 78, highlighting the need for proper officer to record reasons in writing for expedient recovery. The Court stresses the importance of natural justice principles in coercive actions, requiring proper communication and specified time for payment.Issue 4: Judicial DirectionsReferring to a previous decision, the Court directs the refund of the recovered tax amounts and imposes costs on the Assessing Officer for acting against statutory provisions. The judgment orders the refund within two weeks and specifies interest rates for delayed refunds. Additionally, a cost is imposed on the Officer who issued the demand and appropriated funds from the petitioner's account.In conclusion, the writ petition is allowed based on the terms set forth in the judgment, emphasizing adherence to legal provisions, natural justice principles, and proper procedures in tax recovery proceedings.
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