Facts of the Case:

In this case, the petitioner challenged the recovery proceedings initiated by the State tax authorities under the West Bengal Goods and Services Tax Act, 2017 (WBGST Act). The petitioner contended that the order passed under Section 73(9) dated August 28, 2024,, determining tax, interest, and penalty, failed to consider the provisions of Section 16(5) of the Act and the CBIC Circular dated October 15, 2024.

Subsequently, the petitioner filed a rectification application under Section 148 of the Act on April 3, 2025, seeking correction of the said order. However, without disposing of the rectification application, the authorities issued a recovery notice dated October 30, 2025, prompting the petitioner to approach the High Court. The State contended that the order under Section 73(9) was passed in accordance with law and was appealable, and therefore, the writ petition was not maintainable.

Issue:

Whether the revenue authorities could initiate recovery proceedings under Section 79 without first deciding the petitioner’s pending rectification application under Section 148 of the WBGST Act.

Held that:

The Calcutta High Court held that since the petitioner had already filed a rectification petition raising substantial issues concerning the legality of the order passed under Section 73(9), particularly its compliance with Section 16(5) and the relevant CBIC Circular, the interest of justice required that such rectification petition be decided first.

Accordingly, the Court directed the department to dispose of the rectification application dated April 3, 2025, in accordance with law, after granting an opportunity of hearing to the petitioner and by passing a reasoned order within four weeks from receipt of the court’s order. The Court further restrained the authorities from giving effect to the recovery notice dated October 30, 2025, until two weeks after communication of the decision on the rectification petition.

The judgment reinforces that when a rectification application under Section 148 is pending consideration, recovery proceedings must be kept in abeyance until the rectification is adjudicated. The decision upholds the principle of procedural fairness and protects taxpayers from premature recovery actions while their statutory remedies remain pending.

Case Name:  M/s. Mega Basket Versus The Senior Joint Commissioner of State Tax, Siliguri Circle, Siliguri & Ors. dated 07.11.2025

To read the complete judgement 2025 Taxo.online 2893