In a major relief to the Chandigarh municipal corporation (MC), the Punjab and Haryana high court (HC) on Wednesday stayed the central goods and service tax (CGST) department’s order of freezing the civic body’s accounts in 18 banks.
The MC was, however, told by the HC to clear the pending dues to the tune of ₹3.37 crore to the CGST division Chandigarh, by September 8.
The MC had petitioned against the order of the CGST division of the Union finance ministry, which had ordered freezing of as many as 18 bank accounts of the civic body on September 1, as the GST dues had piled up to ₹3.37 crore till March 2021.
In a notice to the banks and MC, the assistant commissioner of CGST Chandigarh division, Harshita Khatri, said, “As per the notice issued on March 30, 2021, an amount of ₹3,37,10,995 is pending from the Chandigarh MC, while a penalty of ₹2,01,71,915 has also been imposed on the civic body. Hence, all the banks are directed that no further withdrawal be allowed without the consent of this office.”
In the petition, the MC said that pursuant to the notice, all the banks have acted upon the notice, which is crippling the working and functioning of the Chandigarh MC. They also said that MC was ready to deposit the principal amount of ₹3.37 crore by September 8. The recovery notice which was dated September 1, is in pursuance of the ex parte proceedings order dated March 30, 2021, wherein proceedings were held during Covid 19 pandemic and which has led to the demand which is now being enforced, it argued.
{{/usCountry}}In the petition, the MC said that pursuant to the notice, all the banks have acted upon the notice, which is crippling the working and functioning of the Chandigarh MC. They also said that MC was ready to deposit the principal amount of ₹3.37 crore by September 8. The recovery notice which was dated September 1, is in pursuance of the ex parte proceedings order dated March 30, 2021, wherein proceedings were held during Covid 19 pandemic and which has led to the demand which is now being enforced, it argued.
{{/usCountry}}Taking note of the submissions, the high court bench of justice GS Sandhawalia and justice Harpreet Kaur Jeewan, observed that such attachment would cause extreme harassment to the public service utility, which are being serviced by the MC. Hence, directed that all the banks in question would not take any steps on the recovery notice issued on September 1.