Refund of coercively recovered tax ordered with interest and officer penalised; refund within two weeks required.

Coercive recovery of a disputed tax was ordered to be refunded; the authority directed restitution of amounts seized by bank by a specified date, with interest at 12% per annum payable if refund is delayed, and a personal cost imposed on the officer who issued the peremptory demand and appropriated funds. If the refund is made within the directed period, no statutory interest will be claimable for the period the State retained the sums should the demand later be confirmed. The decision obliges immediate reimbursement and penalises improper administrative appropriation of taxpayer funds.

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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 Constitution
The 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 Proceedings
The 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 Justice
The 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 Directions
Referring 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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