Section 74 of the CGST Act, 2017—Demand  - Assessment under Section 130 is unsustainable —The petitioner challenged the order dated 29.01.2019 whereby tax, penalty and fine total Rs.52,54,000/- has been assessed against the petitioner as well as the appellate order dated 15.06.2020 whereby the appeal was partly allowed. A search was carried out on 29.09.2018, and the petitioner was compelled to deposit an amount of Rs.52,20,000/- under Section 130 for getting the seized goods released. The appeal was partly allowed and an amount of tax, penalty assessed was quantified at Rs.15,84,810/-. The Counsel for the petitioner stated that the goods were quantified only on the basis of the eye estimation, and in any event while proceeding to pass an order under Section 130, no power is vested in the authority to undertake the determination of liability of tax, which can only be done by taking recourse to Section 73 or Section 74 of the Act. The court relied the case of M/s Metenere Limited and observed that the entire exercise resorted to under Section 130 for assessment/ determination of the tax and the penalty is neither stipulated under the Act, nor can be done in the manner in which it has been done. As the entire tax has been determined and the penalty has been levied only on the basis of a survey by taking recourse under Section 130 and not taking a recourse to Section 74, the order impugned is clearly unsustainable. Further, in terms of Clause (a) of Section 169(1), a service would be completed only when it is tendered to the taxable person or on his Manager or authorized representative. Serving on the Accountant of the firm is neither contemplated nor provided for under Section 169(1)(a) and thus, the service on the Accountant cannot be held to be a valid service. The appellate authority has erred in repelling the valuation done on the basis of eye estimation, however, has proceeded to value the goods (although differently) at the appellate stage without resorting to the mandate and manner prescribed in Section 15 read with the Rules, thus, the impugned order is not sustainable.

Held that:- The Hon’ble High Court set aside the impugned order dated 29.01.2019 and directed that the amount deposited by the petitioner shall be refunded subject to the outcome of the demand quantified under Section 74  in accordance with law.