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TaxTMI 
Landmark Judgments on Recovery Proceedings under GST Law: A Legal Analysis
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....andmark Judgments on Recovery Proceedings under GST Law: A Legal Analysis<br>By: - Abhishek Raja<br>Goods and Services Tax - GST<br>Dated:- 24-6-2025<br>The Goods and Services Tax (GST) regime, while streamlining indirect taxation, has also led to contentious recovery proceedings by tax authorities. Several High Courts have intervened to uphold procedural fairness and statutory safeguards for taxp....
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....ayers. This article examines five landmark judgments that delineate the boundaries of the GST Department's recovery powers and emphasize due process. 1. Deemed Stay on Recovery Upon Pre-Deposit: M/S. CHAIZUP BEVERAGES LLP VERSUS DEPUTY COMMISSIONER OF GST & CENTRAL EXCISE - 2019 (4) TMI 1496 - MADRAS HIGH COURT Key Takeaway: The Madras High Court held that once an assessee files an ap....
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....peal against a demand order with the mandatory 10% pre-deposit under Section 107(6) of the CGST Act, the balance demand is deemed stayed by operation of law. The Court ruled that adjusting a taxpayer's refund against the disputed demand-merely because no explicit stay was granted-was unsustainable. The department was directed to release the refund within three weeks. Implication: This ....
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....judgment reinforces the statutory protection against coercive recovery during the pendency of an appeal, provided the pre-deposit condition is met. 2. Premature Recovery Notice: PENNA CEMENT INDUSTRIES LTD. VERSUS THE STATE OF ANDHRA PRADESH, THE CHIEF COMMISSIONER (ST), THE ASSISTANT COMMISSIONER (ST) -L - 2024 (2) TMI 122 - ANDHRA PRADESH HIGH COURT Key Takeaway: The department issued a ....
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....recovery notice while the statutory limitation period for filing an appeal was still alive. The High Court quashed the notice, holding that the assessee must be allowed to exercise their right to appeal before recovery commences. Implication: Tax authorities cannot bypass the statutory appeal period to expedite recovery. Such actions undermine the taxpayer's right to contest the demand. 3. Dema....
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....nd Notice Within 10 Days: TVL. GRB DAIRY FOODS PVT LTD. VERSUS THE STATE OF TAX OFFICER, THE STATE TAX OFFICER (INTELLIGENCE), THE ASSISTANT COMMISSIONER (ST) - 2019 (10) TMI 1233 - MADRAS HIGH COURT Key Takeaway: The department issued a demand notice for tax, interest, and penalties merely 10 days after the assessment order, despite the law granting taxpayers three months&nb....
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....sp;to appeal. The Court disapproved of this haste, observing that recovery proceedings must await the expiry of the appeal period. Author's View: Cases 2 and 3 highlight a troubling trend of authorities rushing to recover amounts even when the demand is under challenge. Courts have consistently frowned upon such overreach. 4. Violation of Natural Justice: TVL. ARUN MEDICALS VERSUS ASSISTANT COM....
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....MISSIONER (ST), THE MANAGER, INDIAN OVERSEAS BANK, MECHERI - 2024 (10) TMI 438 - MADRAS HIGH COURT Key Takeaway: The GST registration of the assessee was cancelled, and the department uploaded the show-cause notice (SCN) only on the GST portal without physical service. The Court set aside the order, ruling that mere portal upload does not constitute valid service, especially when the taxpay....
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....er's ability to access the notice was compromised. Implication: Natural justice demands effective communication of SCNs. In cases of cancelled registrations, alternate modes of service (e.g., email, post) must be adopted. 5. Recovery Without Notice: PRASANNA KARUNAKAR SHETTY VERSUS STATE OF MAHARASHTRA, COMMISSIONER OF STATE TAX, MUMBAI, STATE TAX OFFICER - 2024 (4) TMI 779 - BOM....
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....BAY HIGH COURT Key Takeaway: The department attached the assessee's bank account without issuing any SCN or hearing opportunity. The Court struck down the order as violative of Article 300A (right to property) and Article 14 (right to equality) of the Constitution. Implication: Recovery proceedings cannot be initiated ex parte. Principles of natural justice are non-negotiab....
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....le, even in tax enforcement. Conclusion: Balancing Revenue and Rights These judgments underscore that while the GST law empowers authorities to recover dues, such power must be exercised within the bounds of: * Statutory timelines (e.g., appeal periods), * Natural justice (proper notice and hearing), and * Constitutional protections (right to property and due process). Taxp....
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....ayers facing aggressive recovery actions should promptly seek legal remedies, as courts have repeatedly intervened to curb procedural excesses. For the department, these rulings serve as a reminder: recovery must be fair, not fast. ---- Abhishek Raja Ram 9810638155<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....