High Court: Compliance with Bank Guarantee Deadline Concludes Proceedings

The High Court of Allahabad ruled that if the petitioner deposits the bank guarantee within three weeks as mandated, proceedings under section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 will be deemed concluded. Failure to comply within the specified timeframe would lead to the automatic recall of the order, enabling authorities to proceed as per the law. The judgment, referencing section 129(5) of the Act and a prior case, outlined a conditional resolution, contingent upon the petitioner's timely adherence to the bank guarantee requirement.

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Issues: Proceedings under section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 involving a bank guarantee requirement.

Analysis:
The judgment by the High Court of Allahabad pertains to proceedings initiated under section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 against the petitioner by the Assistant Commissioner, State Tax, Mobile Squad Unit-IV, Varanasi. The show cause notice issued on 8th March, 2018 mandated the petitioner to furnish a bank guarantee equivalent to the specified amount. The petitioner, represented by counsel Sri Aloke Kumar, agreed to comply with the requirement and assured to deposit the bank guarantee within three weeks from the date of the judgment.

The court emphasized that if the petitioner fulfills the obligation of depositing the bank guarantee within the stipulated three-week period, the proceedings initiated under section 129(3) of the Act would be deemed concluded. This conclusion is based on the provisions of section 129(5) of the Uttar Pradesh Goods and Services Tax Act, 2017, and further supported by a previous judgment dated 7th February, 2020, in the case of Writ Tax No. 344 of 2018 (M/s Skipper Limited Vs. Union of India and 3 others) rendered by the same court.

However, it was explicitly stated that failure on the part of the petitioner to adhere to the timeline for depositing the bank guarantee would result in an automatic recall of the order by the court. In such an event, the authorities would be authorized to proceed with the matter in accordance with the relevant legal provisions. Consequently, the writ petition was disposed of in line with the terms outlined in the judgment, indicating a conditional resolution contingent upon the timely compliance of the petitioner with the bank guarantee requirement.

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