TaxTMI 
TaxTMI 
2026 (4) TMI 1810
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....ring Account No.922010024838131 maintained with the 2nd Respondent Bank and further sought a direction to the 1st Respondent to refrain from recovering the dues payable by M/s. RU Information Technologies Pvt. Ltd. under Order-in- Original No. 1/2020 dated 28.02.2020 from the petitioner. 4. The Order-in-Original No.1/2020 dated 28.02.2020 was passed against the Company M/s. RU Information Technologies Private Limited, following Show Cause Notice (SCN) No.01/2019(ST) dated 16.04.2019, in which the petitioner herein was a Director. 5. By the said Order-in-Original, the following demands were confirmed against M/s. RU Information Technologies Private Limited, including a penalty of Rs. 1 Lakh imposed on the petitioner. "8(i) I confirm the demand of Rs. 31,01,304 /- (Rupees Thirty-One Lakhs One Thousand Three Hundred and four only) being the Service Tax (including Cesses), payable on the value of Information Technology Service provided by M/s. Ru Information Technologies Private Limited during the period from Oct. 2013 to Mar. 2017 under the provisions of Section 73(2) of FA, 1994 and direct them to pay the same forthwith; 8(ii) 1 confirm the demand of interest ....
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....resaid Order-in-Original dated 28.02.2020. 7. Arguing the case on behalf of the petitioner, the learned counsel would submit that this issue is no longer res integra and is covered by a detailed order of the Division Bench of Delhi High Court in Sanjiv Kumar Mittal vs. Deputy Commissioner (TRC), CGST, Delhi South [2021 (44) G.S.T.L. 14 (Del.), dated 06.11.2020. 8. On the other hand, the Learned Senior Standing Counsel for R1 would submit that this issue has already been settled by the Division Bench of the Kerala High Court in K. Vinod Chandran vs. Ashok Menon [2019 (367) E.L.T. 166 (Ker.)] and by a Learned Single Judge of the Calcutta High Court in Roopchand Prasad vs. Union of India [2019 (365) E.L.T. 868 (Cal.)]. 9. The Learned Senior Standing Counsel also drew attention to Paragraphs 5 and 6 of the counter affidavit filed in W.P.No.8366 of 2025, wherein reference is made to the Guwahati High Court case in Lakshmi Narayan Sahu vs. Union of India, decided on 12.10.2018. 10. For the sake of convenience, paragraphs 5 and 6 of the counter affidavit in W.P.No.8366 of 2025 are reproduced below: "5. It is submitted in para A, that the petitioner has stated that Sec....
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.... of its Directors, along with one Aarti Seshadri. 14. The demand confirmed against the said company has been extracted above. The invocation of Sections 89(1) and 174(2)(e) of the CGST Act, 2017, applies only where liability accrued under the relevant enactments referred to in Section 173 of the CGST Act, 2017, and Section 173 of the TNGST Act, 2017. 15. Under the scheme of the Finance Act, 1994, there were no provisions for recovering tax liability from individual directors. This is evident from a reading of Section 87 of the Act. 16. Section 87 of the Finance Act, 1994 is reproduced below: "Where any amount payable by a person to the credit of the Central Government under any of the provisions of this Chapter or of the rules made thereunder is not paid, the Central Excise Officer shall proceed to recover the amount by one or more of the modes mentioned below: (a) the Central Excise Officer may deduct or may require any other Central Excise Officer or any officer of customs to deduct the amount so payable from any money owing to such person which may be under the control of the said Central Excise Officer or any officer of customs; (b) (i) the C....
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....mount specified thereunder as if it were an arrear of land revenue." 17. Section 174(2)(e) of the CGST Act, 2017 only empowers the authorities under the respective GST enactments to enforce liabilities that have already crystallized. Therefore, the petitioner, at best, can be proceeded against only to the extent of Rs. 1 Lakh, which was imposed as a penalty under Section 78A of the Finance Act, 1994 by Order-in-Original No.1/2020 dated 28.02.2020. 18. It is submitted by the learned counsel for the petitioner that the aforesaid penalty of Rs. 1 Lakh was already paid by the petitioner on 14.07.2023. A copy of the challan evidencing the payment is enclosed in the typed set of papers. 19. It is also noticed that the petitioner informed the 1st respondent of the aforesaid payment via Communications dated 15.07.2023 and 20.09.2023, however, the respondent has failed to respond. 20. In view of the above discussions, my view is also fortified by the view of the Division Bench of the Delhi High Court in Sanjiv Kumar Mittal vs. Deputy Commissioner (TRC), CGST, Delhi South, referred to supra. In Paragraph 24 of the said judgment, the Division Bench observed as under: "24.....