Page 117 - GSTL_21st May 2020_Vol 36_Part 3

2020 ] STATE BANK OF INDIA v. UNION OF INDIA 363
der Section 174(2) of the CGST Act r/w Section 142(8) of the CGST Act , the ac-
tion of the 3rd respondent is valid in law.
The stand of the 6th respondent
27. In the affidavit filed along with IA No. 2 of 2019, the 6th respondent
Company supported the stand of the respondents 1-3 and contended that peti-
tioner cannot challenge the impugned notice.
28. While admitting that the 6th respondent had borrowed loans from
the petitioner, it is stated that it is still a going concern, but is passing through a
bad phase financially. It admitted that it has liability towards Service Tax and
also was in default of provident fund contributions.
29. It claimed that it had made a claim under the Sabka Vishwas (Lega-
cy Dispute Resolution) Scheme, 2019 in so far as Service Tax arrears are con-
cerned on 31-10-2019 under ARN No. LD3110190000255; that in view of the am-
nesty scheme, the demand for service tax would get settled at 60% of the tax
component and that the interest component would be totally waived of, subject
to acceptance by the Determination Committee under the scheme.
30. It also stated that the PF arrears are to the tune of Rs. 3,89,42,739/-
and already a Garnishee notice was served by the 5th respondent on the bank
account of the petitioner lying with the petitioner.
31. It is contended that the petitioner is only one of the Banks of the
consortium and that there are other Bankers/lenders and the petitioner cannot
claim the entire amount of the Income Tax refund given to the 6th respondent.
The stand of the 5th respondent
32. In its counter the 5th respondent stated that the 6th respondent is
covered under the provisions of the Employees Provident Fund and Miscellane-
ous Provisions Act, 1952; that 6th respondent did not remit Provident Fund Con-
tributions from April, 2016 to September, 2018; that the authorized Officer issued
order under Section 7A and 14B of the said Act determining the dues payable
under the said Act; that Recovery officer received Recovery certificates for Rs.
4,23,39,801/- against which only Rs. 25,58,161/- was recovered leaving a balance
of dues of Rs. 3,97,83,640/-.
33. It is also stated that under Section 8F(3)(X), a notice dated 27-8-2019
was also issued to the Branch Manager, State Bank of India, SAM Branch-2, Ka-
cheguda, Hyderabad.
34. It is stated that it has initiated action under Section 8B to 8G of the
said Act and as part of such recovery actions prohibitory order has been issued
under Section 8F against the petitioner, who is the banker of the 6th respondent,
which had committed default in payment of Provident Fund Contributions. Reli-
ance is also placed on Section 11 of the said Act which deals with ‘priority of
payment of contributions over other debts’. Reference is also placed to certain
unreported decisions of various courts none of which are furnished to the Court.
35. It is contended that the 5th respondent has priority over the dues of
the Banks or Government departments.
36. It prayed that a direction be given to the petitioner to make pay-
ment of the Income Tax refund amount to it.

GST LAW TIMES  21st May 2020  117