Recovery under Section 79 APGST Act is valid without fresh notice when tax liability is already determined; writ petition dismissed.
Meetu Kumari | Apr 20, 2026 |
High Court Upholds GST Recovery from Bank Account Without Prior Notice Where Assessment Order Attained Finality
The petitioner, V.V.S. Enterprises, a registered dealer under the APGST Act, challenged a recovery notice dated 05.02.2026 issued under Section 79(1)(c), whereby the tax authorities directed the petitioner’s bank to remit Rs. 7.54 lakh towards outstanding tax dues. The petitioner contended that such recovery action was initiated without prior notice, without adjudication under Sections 73 or 74, and without proper authorisation, thereby violating principles of natural justice.
The State, however, submitted that an assessment order dated 17.01.2025 determining the tax liability had already been passed and uploaded on the portal. Since the petitioner failed to discharge the dues even after a considerable lapse of time, recovery proceedings under Section 79 were initiated through the bank.
Main Issue: Whether recovery proceedings under Section 79(1)(c) of the APGST Act can be initiated against a bank without issuing a prior notice to the assessee, particularly when the tax liability has already been determined and attained finality.
HC’s Decision: The High Court dismissed the writ petition and upheld the recovery proceedings. The Court held that Section 79 is a recovery provision that can be invoked once tax dues are determined and remain unpaid. It does not mandate the issuance of a prior notice to the assessee before initiating recovery from third parties such as banks. Further, no separate authorisation is required where the statute itself empowers the “proper officer,” and the notification issued by the department clearly designates the concerned officer as competent.
The Court noted that those cases involved situations where tax liability had not yet been adjudicated. In contrast, in the present case, the assessment order had already been passed and remained unchallenged, thereby attaining finality.
Therefore, the Court found no illegality in the impugned notice and upheld the action of the tax authorities in recovering dues directly from the bank account.
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