TaxTMI 
TaxTMI 
Liability Paid, Yet Recovery Being Initiated!
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....iability Paid, Yet Recovery Being Initiated!<br> Query (Issue) Started By: - Narayan Pujar Dated:- 25-1-2025 Last Reply Date:- 4-2-2025 Goods and Services Tax - GST<br>Got 7 Replies<br>GST<br>An order u/s 74 was passed against one of my clients by the CGST Department, imposing a 100% penalty. This was because, at the time of passing the order, the officer couldn't confirm if the client would avail....
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.... the relief under Section 74(11), which allows a 50% penalty reduction if payment is made within 30 days. The client has since made the payment within the stipulated time and adjusted all liabilities using the DRC-03A functionality. However, the SGST Department, which handles recovery, is still demanding the remaining 50% penalty. They argue it's recoverable solely because it appears in the E-Lia....
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....bility Ledger, which they claim they cannot update. Despite discharging all liabilities as per law, the SGST officer is threatening bank attachment for the so-called "outstanding" penalty. The Central GST Officer is reluctant in rectifying order to 50% penalty as it does not fall within Section 161. What could be a possible solution to resolve this situation? Reply By Sadanand Bulbule....
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....: The Reply: Dear Make a suitable and factual written representation to the concerned Joint Commissioner and submit in person. Many a times officers work like machines without application of mind. Reply By KASTURI SETHI: The Reply: (i) After deposit of tax along with interest and 25 % penalty within stipulated period, all the proceedings in respect of the said notice shall be deemed to be con....
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....cluded as per Section 74 (11). The emphasis is laid on the words ,'shall'' and 'deemed'. (ii) The word,' shall' signifies mandatory nature. and the word, 'deemed' means, ''considered' supposed'', construed'', thought'', taken to be'', presumed'', judged'', decided''. (iv) In this situation, th....
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....e benefit of reduced penalty is mandatory for the tax payer/noticee and inherent in Section 74(11) even without mentioning the option for the benefit of reduced penalty'' in the order portion of the Order-in-Original. (v) You can take shelter of the following judgement of Delhi High Court which is in favour of the assessee on the same issue. 2016 (12) TMI 1279 - DELHI HIGH COURT - FUTUR....
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....E LINK INDIA Versus COMMISSIONER OF CENTRAL EXCISE, DELHI-II (vi) The department cannot demand the remaining amount of penalty now. (vii) You must see the jurisdictional Commissioner in person. (viii) As per Section 74 (11) all proceedings stand concluded now because you have fulfilled the conditions as mentioned by you. (ix) Pl. note that Sections 132 and 122 are out of the scope of Section ....
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....74 (11) for the purpose of deemed conclusion. Reply By Shilpi Jain: The Reply: Portal law cannot override the Statute. This is enough to understand this situation. Any action initiated by the department officer stating it to be due to portal, can be challenged. Reply By KASTURI SETHI: The Reply: I have read one judgment to this effect as advised by Madam Shilpi Jain. One has to work hard to tr....
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....ace out the same. Reply By Narayan Pujar: The Reply: Thank you all for your views. Reply By Padmanathan KV: The Reply: In my opinion, it is well covered under section 161. Unfortunately, the central Department is refraining from exercising 161 powers. So best option is to file for rectification, approach jurisdictional High Court. Reply By KALLESHAMURTHY MURTHY: The Reply: Dear Sirs, In my....
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.... opinion. as per the provisions of Sec. 74(11), the penalty levied in the order as per Sec. 74(9) for 100% will have to be reduced to 50% when the tax is paid within 30 days with interest and penalty at 50% of the order. The authority who passed the order has to draw a proceeding u/s 74(11) for the deemed conclusion giving effect to the liability of penalty reducing to 50%. The recovering authorit....
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....y has no option but to recover the dues as displayed in the portal.<br> Discussion Forum - Knowledge Sharing ....