2020 (3) TMI 238 - HC - GST

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 ... Proceedings under section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 - deposit of bank guarantee as conditional compliance - conclusion of proceedings under section 129(5) of the Uttar Pradesh Goods and Services Tax Act, 2017 - compliance undertaking and conditional disposal - recall of order on failure to comply - precedential reliance on Writ Tax No. 344 of 2018 (M/s Skipper Limited Vs. Union of India and 3 others)Proceedings under section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 - deposit of bank guarantee as conditional compliance - conclusion of proceedings under section 129(5) of the Uttar Pradesh Goods and Services Tax Act, 2017 - precedential reliance on Writ Tax No. 344 of 2018 (M/s Skipper Limited Vs. Union of India and 3 others) - recall of order on failure to comply - Conditional disposal of proceedings under section 129(3) on the petitioner's undertaking to deposit the bank guarantee within three weeks and application of section 129(5) and relevant precedent - HELD THAT: - The Court accepted the petitioner's undertaking to deposit the bank guarantee demanded in the show cause notice dated 8th March, 2018 and directed that, if the bank guarantee is deposited within three weeks, the proceedings initiated under section 129(3) shall stand concluded in terms of section 129(5) of the UP GST Act and the law laid down in Writ Tax No. 344 of 2018 (M/s Skipper Limited). The order implements conditional disposal based on compliance: deposit within the stipulated period results in closure of the proceedings; failure to comply results in automatic recall of the order and permits the authorities to proceed as per law. The Court therefore disposed of the writ petition subject to the stated condition and precedent.Petitioner to deposit the bank guarantee within three weeks; on deposit proceedings under section 129(3) concluded under section 129(5) and the cited precedent; order to be recalled automatically if the petitioner fails to comply and authorities may proceed in accordance with law.Final Conclusion: Writ petition disposed of by conditional order: deposit of the stipulated bank guarantee within three weeks will terminate the section 129(3) proceedings under section 129(5) as per the cited precedent; failure to deposit will result in automatic recall of the order and continuation of proceedings by the authorities. 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.