No, the Honorable Madras High Court in the case of Tvl. Cargotec India (P.) Ltd. v. Assistant Commissioner (ST) [Writ Petitioner No. 13104 of 2023 dated 13.04.2024] allowed the writ petition and held that no recovery measures shall be undertaken by the GST authorities for a period of three months from the date of such order as per the proviso to Section 78 of the Central Goods and Services Tax, 2017.
The Honorable Madras High Court observed that the proviso to Section 78 of the Tamil Nadu Goods and Services Tax Act, 2017, may be invoked only if the proper officer records in writing the reason as to why he considers it expedient in the interest of the revenue to require the taxable person to make payment even before the expiry of the prescribed three-month period. In the case in hand, no material was placed on record to justify invoking the proviso to Section 78 of the CGST Act. The Honorable Court held that the Respondents either refund the recovered amount or re-credit the same to the Petitioner’s Electronic Cash or Credit Ledgers, as the case may be, within one months from the date of receipt of the copy of the said Order because the Respondents failed to satisfactorily explain the recourse to the proviso to Section 78 of the CGST Act.
Author’s Comment:
As per Circular No. 03/03/2017- GST dated 5th July 2017, the Proper officer for recovery under section 79 of the CGST Act, 2017 is the jurisdictional Deputy or Assistant Commissioner of Central Tax. The Proper officer under proviso to section 78 (for early recovery) is the jurisdictional Principal Commissioner/ Commissioner of Central Tax. Recently, instruction no. 01/2024-GST dated 30.05.2024 has been issued by the CBIC laying down guidelines for initiation of recovery proceedings before three months from the date of service of demand order. Important to mention that the decision for early recovery action under proviso to section 78 is a non-appealable decision, although not listed in section 121 (Non-appealable decisions or orders).
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