Proceedings without assessment is void ab initio.

Case Details:

Issue- In the above case, the petitioner has challenged the impugned proceedings initiated straightaway by the respondent authority under Section 79 wherein bank manager of petitioner was directed to recover the due amount from the bank account of petitioner. The grievance of the petitioner against the impugned proceedings was that the same was issued straightaway, even before making an assessment or atleast initiating proceedings for making the assessment. It was the specific case of the petitioner that no proceedings whatsoever, was issued against the petitioner for determining either the tax, cess or interest or penalty totally amounting to Rs.53,28,645/- as claimed in the impugned proceedings. Therefore, it was contended that Section 79 of the Central Goods and Services Tax Act, 2017, cannot be invoked by the respondent to recover the said sum as if, such sum is an arrear payable by the petitioner. The petitioner further pointed out that though a statement was obtained from the petitioner on 19.06.2019, by the Superintendent of GST, stating as if the petitioner availed input credit during the period from June -2018 to October – 2018 on the strength of invoices of fake units, the said statement was subsequently retracted by the petitioner through communication dated 26.06.2019, specifically, by stating that the petitioner’s answer is to be read as that they have so far taken ITC of Rs.53,28,645/- for goods received along with invoices.

Held- It was held that except issuing the proceedings under Section 79, no other proceedings was ever issued against the petitioner determining their tax etc., liability, amounting to Rs.53,28,645/- as claimed in the impugned proceedings. Section 79 of the CGST Act, 2017 contemplates that any amount payable by a person to the Government under any of the provisions of the said Act or the Rules made there under is not paid, the proper officer shall proceed to recover the amount by one or more of the modes referred to therein. Therefore, it is evident that the term “amount payable by a person” is to mean that such liability arises only after determination of such amount in a manner known to law. Further, it was for respondent authority to determine the tax liability by resorting to the procedures in accordance with law, instead of issuing the impugned proceedings straightaway under Section 79 based on the so called admission which is subsequently retracted. Therefore, the court find that the impugned proceedings issued under Section 79 was not sustainable. Also No doubt, the respondent sought to rely upon Section 83 to contend that the first respondent is entitled to make the provisional attachment but perusal of Section 83 would show that the such provisional attachment can be resorted to only when proceedings are pending under any of the provisions viz., Section 62, 63, 64, 67, 73 and 74 but in this case, no such proceedings were pending as on date under any of the above provisions. Therefore, the court was of the view that Section 83 also would not come to the rescue of the respondent to sustain the impugned proceedings. Therefore, writ petition was allowed and impugned proceedings were set aside.