The Bombay High Court has held that the Goods and Service Tax (GST) recovery notice cannot be issued directly to banks.
The bench of Justice M.S. Sonak and Justice Jitendra Jain has observed that a notice was directly served to the bank and not to the person who was allegedly due and payable some amount to the person in default. It was in breach of the mandatory procedure prescribed under the CGST Act and the GST recovery notice issued directly to the bank is liable to be quashed.
The petitioner/assessee has challenged the notice issued under Section 79(1)(c) of the Central Goods and
Services Tax Act, 2017 (CGST Act) on several grounds that are set out in the petition.
The assessee contended that the notice though issued under Section 79(1)(c) was not addressed to the petitioner but the same is addressed to the Branch Manager of the Bank at Gurugram. The petitioner has stated that the petitioner does not have any bank account at Gurugram and the bank account referred to in the notice is with the Mulund Branch. The petitioner has also pleaded that no amount is due and payable to M/s. Durga Madhab Panda (Urneed Online Retail) which is allegedly liable to pay GST dues to the extent of Rs.30.19 crores.
Section 79 of the CGST Act, 2017 is concerned with the recovery of tax. Section 79 (1)(c)(i) provides that the proper officer may, by a notice in writing, require any other person from whom money is due or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the Government either forthwith upon the money becoming due or being held, or within the time specified in the notice not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount.
The court quashed the notice but left it open to the GST department to serve a fresh notice on the petitioner should they wish to.
Case Details
Case Title: M/s. Galaxy International Versus Union of India & Ors.
Case No.: WRIT PETITION NO. 11399 OF 2024
Date: 24 June 2025
Counsel For Petitioner: Prakash Shah, Senior Advocate
Counsel For Respondent: Jitendra B. Mishra
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