Interim restraint on GST recovery was made conditional on statutory deposit and security compliance

Interim protection was granted against coercive recovery of tax and penalty demands where the challenge concerned alleged non-service of the impugned order and rejection of the appeal as time-barred. The restraint was made conditional on compliance with the statutory pre-deposit and security framework under the Uttar Pradesh GST law: deposit of the tax amount and 50% of the penalty, with security for the balance penalty after adjusting amounts already paid. The operative effect was that recovery action remained stayed only so long as the prescribed deposit and security requirements were satisfied.

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Issues: Whether, pending filing of counter affidavit and further consideration, coercive action on the impugned tax and penalty orders should be restrained subject to compliance with the statutory deposit and security conditions.

Analysis: The petition challenged the tax and penalty orders and the subsequent recovery notice on the ground that the impugned order had not been duly served in time and the appeal had been rejected as time-barred. Pending adjudication of the controversy, the Court granted interim protection on the condition that the petitioner deposit the tax amount and 50% of the penalty and furnish security for the remaining penalty amount, after adjusting the amount already deposited, in the manner contemplated by Section 129(1)(a) of the Uttar Pradesh Goods and Services Tax Act, 2017 read with Rule 140 of the Uttar Pradesh Goods and Services Tax Rules, 2017.

Conclusion: Coercive action was restrained subject to compliance with the specified statutory conditions.

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