CGST demand and bank attachment notices set aside as authority must reconsider the matter under binding Supreme Court precedent.

Demand orders under Section 73 of the CGST/RGST Act, 2017 and the resulting bank account attachment notices were set aside because the parties accepted that the dispute was governed by the Supreme Court ruling in Mineral Area Development Authority v. Steel Authority of India. The HC directed the competent authority to reconsider the matter afresh in light of that binding decision, with both parties free to place their respective stands before the authority. The recovery notices could not be sustained in their existing form pending such re-examination.

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Issues: Whether the demand order passed under Section 73 of the CGST/RGST Act, 2017 and the consequential recovery notices attaching the bank account were liable to be set aside and the matter remanded for fresh consideration in light of the Supreme Court decision on royalty-based GST liability.

Analysis: The parties were ad idem that the issue stood covered by the Supreme Court decision in Mineral Area Development Authority v. Steel Authority of India. In view of that position, the demand order and the recovery notices could not be sustained in their existing form and the competent authority was required to re-examine the matter afresh while considering the binding effect of the Supreme Court ruling. The parties were left free to place their respective stands before the authority.

Conclusion: The demand order and the impugned recovery notices were set aside and the matter was remanded to the competent authority for fresh adjudication.

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