Bombay HC quashes recovery notice issued to a Bank holding that the notice must be issued to the Petitioner & an opportunity must be given to rebut the presumption of liability

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....ombay HC quashes recovery notice issued to a Bank holding that the notice must be issued to the Petitioner & an opportunity must be given to rebut the presumption of liability<br>By: - Bimal jain<br>Goods and Services Tax - GST<br>Dated:- 7-7-2025<br>The Hon'ble Bombay High Court in the case of M/s. Galaxy International Versus Union of India & Ors. &nbsp;- 2025 (6) TMI 2035 - BOMBAY HIGH COURT hel....

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....d that notice under Section 79(1)(c) of the Central Goods and Services Tax Act, 2017 ("the CGST Act") ought to be issued to the Petitioner instead of the Bank in so far as the Petitioner must be allowed an opportunity of proving to the satisfaction of the proper officer that no amount was due and payable by the Petitioner to a person in default. Facts: Galaxy International ("the Petitioner") cha....

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....llenged a notice dated July 9, 2024, issued by the Respondent authorities under Section 79(1)(c) of the CGST Act. The said notice was addressed to the Branch Manager of the third respondent bank at Gurugram, demanding recovery of GST dues allegedly owed by one M/s. Durga Madhab Panda (Urneed Online Retail) to the tune of Rs.30.19 crores. The Petitioner contended that it neither held any money for ....

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....the said defaulter nor had any bank account in Gurugram, with its actual bank account being with the Mulund branch. The Petitioner contended that no notice was served under Section 79(1)(c) and that the Petitioner was denied an opportunity to rebut the presumption of liability. Issue: Whether issuance of recovery notice to a third-party bank under Section 79(1)(c) without prior notice to the ass....

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....essee is legally sustainable? Held: The Hon'ble Bombay High Court in M/s. Galaxy International Versus Union of India & Ors. &nbsp;- 2025 (6) TMI 2035 - BOMBAY HIGH COURT held as under: * Observed that Section 79(1)(c) requires notice to be served upon a person holding or likely to hold money for the defaulter, so that such person may rebut the assumption of liability. * Noted that no notice ....

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....was served upon the Petitioner, depriving it of an opportunity to prove that it neither held nor owed any money to the defaulter. * Relied on the decision of the Karnataka High Court in SJR Prime Corporation Private Limited Versus The Superintendent Of Central Tax, The Assistant / Deputy Commissioner Of Central Tax Eastern Division-8, Bengaluru, The Commissioner Of Central Tax Bengaluru. - 2024 ....

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....(11) TMI 181 - KARNATAKA HIGH COURT where the High Court had quashed a similar notice issued directly to a bank, holding it to be a breach of mandatory procedure. * Held that the Impugned notice dated July 09, 2024 is liable to be quashed for non-compliance with the pre-conditions under Section 79 of the CGST Act and permitted the Respondents to issue a fresh notice to the Petitioner at the corr....

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....ect address, which was already available in the cause title. &nbsp;(Author can be reached at [email protected])<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....