The Calcutta High Court, on Thursday, gave its ruling in the Purulia Metal Casting case, which says that the action taken by the GST department to recover the tax from the electronic cash ledger even before the due time to file the appeal was expired is a certain violation of section 78 of the Central GST Act, 2017.
The petition was filed by Purulia Metal Casting Pvt. Ltd in response to the GST department’s action when it debited the applicant’s electronic credit ledger for the recovery of the tax against the adjudication order dated 14th December 2021. The applicant filed the case of violation of Section 78 of the WBGST Act, 2017 by the GST department, which failed to give the applicant the required three months’ time to file the statutory appeal as mandated before any recovery proceedings can be initiated.
According to Justice Md. Nizamuddin of the Calcutta High Court, the said adjudication order was passed by the department on 14th December 2021, and the demand in question was recovered on 1st February 2022, i.e. within only 49 days from the date of adjudication order, which therefore is a violation of section 78 of the Central GST Act, 2017. In its judgment, the Court has ordered the GST department to refund the money deducted from the credit ledger of the application within 15 days from the date.
However, it can deduct 10% of the demand amount which the applicant is required to deposit anyway when filing an appeal against the adjudication order. The judgement also mentioned that the petitioner must file their appeal within 15 days from the date to the concerned appellate authority, which can then consider the issue of limitation.
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However, if the petitioner does not file an appeal before the authority concerned within the time given, the authority will have the right to take appropriate actions for the recovery of the demand in question. For the time being, the petitioner can also file an appeal offline if not able to file it online.
