GST stay condition modified to require deposit of 10% of tax in dispute, not 10% of entire demand.

In writ proceedings challenging GST adjudication, an interim stay condition requiring deposit of 10% of the entire demand was found overly onerous. The court noted that while security could be ordered under Rule 51 of the Calcutta High Court Rules to protect revenue, the benchmark was more appropriately aligned with the GST appellate pre-deposit standard of 10% of the tax in dispute. The condition was therefore modified, and the appellants were directed to deposit 10% of the tax in dispute instead of 10% of the entire demand.

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Issues: Whether the direction requiring deposit of 10% of the entire demand as a condition for stay in writ proceedings concerning GST adjudication was liable to be modified to deposit of 10% of the tax in dispute.

Analysis: The writ court had entertained the petitions on a prima facie view of maintainability and had granted interim protection subject to security to safeguard revenue. The appellate court held that the condition imposed was traceable to Rule 51 of the Calcutta High Court Rules, which permits stay of realisation on such security as the Court considers adequate. At the same time, the court found that requiring deposit of 10% of the entire demand was more onerous than the statutory pre-deposit contemplated for a GST appeal, where 10% of the tax in dispute is the relevant benchmark.

Conclusion: The condition was modified and the appellants were required to deposit 10% of the tax in dispute instead of 10% of the entire demand.

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