Page 116 - GSTL_21st May 2020_Vol 36_Part 3

362 GST LAW TIMES [ Vol. 36
IA No. 1 of 2019
17. Petitioner had filed IA No. 1 of 2019 in the Writ Petition to suspend
the impugned notice issued by the 3rd respondent on 11-6-2019.
18. On 17-9-2019, this Court granted interim suspension of the
impugned notice.
LA. Nos. 2 and 3 of 2019
19. I.A. No. 2 of 2019 is filed by the 6th respondent and I.A. No. 3 of
2019 is filed by the respondents 1-3 to vacate the said order.
20. The 5th respondent filed a counter affidavit disputing the petition-
ers’ contentions.
The stand of the respondents 1-3
21. In the affidavit filed along with IA. No. 3 of 2019, the respondents
1-3 contended that the 3 respondent has the jurisdiction under Section 87 of the
Finance Act, 1994 to issue the impugned notice under Rule 6A of the Service Tax
Rules, 1994 [which states that “where an amount of service tax payable has been self-
assessed under Section 70(l) of the Act, but not paid, either in full or in part, the same
shall be recoverable along with interest in the manner prescribed under Section 87 of the
Act.”].
22. It is contended that the 6th respondent had failed to pay the self-
assessed service tax. It is also contended that Section 174(2) of the CGST Act, 2017
validates the action for recovery of the Service Tax under Section 87 of the Fi-
nance Act, 1994 due from the 6th respondent and in turn from the petitioner.
23. It is contended that the creation of first charge by 6th respondent by
way of hypothecation of all its current assets and receivables as primary security
was not brought to the notice of the 3rd respondent and that only in the plead-
ings taken by petitioner in the Writ Petition, this became known to respondents 1
-3. However it is contended that petitioner has not stated under what provisions
of which enactment a mere hypothecation of assets (current or otherwise) by 6th
respondent can prevent and/or nullify the proceedings initiated by the 3rd re-
spondent.
24. The respondents 1-3 also claim that they have no knowledge that
the loan account of 6th respondent with petitioner was classified as a ‘Non-
Performing Asset’ on 8-1-2016 and that an OA was filed before the Debts Recov-
ery Tribunal by the petitioner against the 6th respondent. It is contended that the
petitioner has not submitted any copy of the Recovery certificate under Section
31A(2) of the Recovery of Debts and Bankruptcy Act, 1993 and in the absence of
such a certificate, petitioner’s claim over the Income Tax refund amount is not
justified.
25. It is contended that though petitioner approached the NCLT invok-
ing Section 7 of the Insolvency and Bankruptcy Code, 2016, the said petition has
not been admitted by the said forum; that petitioner has not produced proof of
taking possession of the assets of the 6th respondent under Section 13(4) of the
SARFAESI Act, 2002; and that petitioner’s claim that it has a first charge or statu-
tory lien on the Income tax refund amount is not a valid claim.
26. It is contended that the Finance Act, 1994 is still existing even after
the commencement of the CGST Act, 2017, that it has not been repealed and un-
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