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of <h1>Court rules in favor of petitioner, sets aside authority's bank guarantee direction.</h1> The High Court of Kerala ruled in favor of the petitioner, setting aside the authority's direction to invoke the bank guarantee and forward the demand ... Validity of action of the State Tax Officer in directing the 2nd respondent-Bank to invoke bank guarantee and to forward the demand draft of the value of the said bank guarantee to the 1st respondent - petitioner submitted that the direction contained in the order at Ext.P3 to the 2 nd respondent directing the said respondent to encash the bank guarantee and forward the demand draft of the value of the bank guarantee to the 1st respondent is per se illegal - HELD THAT:- Keeping in mind the provisions of Sections 78 and 107 of the GST Act, this writ petition deserves to be allowed with the following directions: The 2nd respondent shall not comply with the directions of the 1st respondent to encash bank guarantee and to forward the amount under the bank guarantee by demand draft to the 1st respondent and the said direction is quashed and set aside. However, the petitioner shall continue the bank guarantee till filing of the appeal. The parties to act on authenticated copy of this judgment. Issues: Challenge to authority's direction to invoke bank guarantee and forward demand draft, Interpretation of Sections 78 and 107 of the Goods and Service Tax Act, Validity of authority's action and petitioner's right to appeal.In this judgment by the High Court of Kerala, the petitioner challenged the action of the State Tax Officer directing the Bank to invoke a bank guarantee and forward the demand draft to the respondent. The petitioner relied on Section 107 of the Goods and Service Tax Act, emphasizing the provision for pre-deposit. Additionally, Section 78 was cited to highlight the petitioner's three-month period for depositing the assessed amount. The petitioner argued that the direction to encash the bank guarantee was illegal, especially since the petitioner intended to file an appeal within the statutory limitation period, extending until 15.05.2021.The learned Government Pleader opposed the writ petition, leading to a detailed analysis by the court. Considering the provisions of Sections 78 and 107 of the GST Act, the court found merit in the petitioner's arguments. The court directed that the 2nd respondent should not comply with the authority's direction to encash the bank guarantee and forward the amount by demand draft. This direction was deemed illegal and subsequently quashed and set aside. However, the court ordered the petitioner to maintain the bank guarantee until the appeal is filed. The judgment also specified that the parties should act based on an authenticated copy of the court's decision, ensuring compliance with the directions provided.
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