High Court directed GST department to consider taxpayer representation for liquidating tax liability in installments and staying the proceedings.

Facts:

The petitioner's group of companies had suffered loss in one of its centre to the extent of Rs.50 Crores. As a result of which the petitioner was unable to discharge tax liability under GST Act.

Under these circumstances, the respondent attached a bank account of the respective petitioner by issuing GST DRC Form, dated 18.02.2022 and 22.02.2022.

The learned counsel for the petitioners submits that the petitioners will liquidate the tax liability over a period of time and therefore, the petitioners be given one more opportunity as petitioners are a going concern and have good business in the Logistics and Port Services.

The learned counsel for the petitioners futher submits that as against the tax liability, the petitioners have also discharged a portion of the tax liability by borrowing the money from the market and will take steps to liquidate the balance by depositing the consolidated amount of Rs. 25,00,000/- per month.

The learned counsel for the petitioners have placed reliance on the decision of the Hon'ble Supreme court in Radha Krishnan Industries Vs State of Himachal Pradesh and others wherein the Court addressed to the point regards the power conferrred upon the authority under Section 83 of the Central Goods and Services Act and observed it as a drastic measure and far reaching power. It is submitted that power under the said provision should be used sparingly and only on substantive grounds and reasons. The learned counsel for the petitioners submits that the Hon'ble Supreme Court upheld the view of the Gujarat High Court in the case of Valerius Industries Vs Union of India.

Revenue:

On earlier occasion, the petitioners were asked to furnish any security that may be accepted by the respondent at the condition for staying the impugned proceedings. However, the respondents have declined to accept the same stating that the properties which were offered were already the subject matter of the charge with banks and further that the properties also did not belong to the petitioners but to the trust of which one of the Director of petitioners was a trustees.

Held:

Considering the fact that the petitioner is agreeing to pay consolidated amount of ₹ 25,00,000/- per month for discharging / liquidating the tax liability in the respective writ petitions, I am inclined the quash the impugned order and remit the case back to the respondent to pass a speaking order after considering the petitioner's representation. However, this order will come into force only after the petitioner's representation is disposed of by the respondent. The petitioners are therefore directed to give a fresh representation with its offer together with such additional security to protect the interest of the revenue to their satisfaction so that a workable formula for liquidating tax liability of the respective petitioners can be achieved. 

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