Bank Guarantee Dispute: GST Petitioner Must Deposit 20% of Tax Amount to Preserve Appeal Rights Under Section 129

The HC ruled on a GST dispute involving bank guarantee invocation under Section 129. The court directed the petitioner to deposit 20% of the disputed tax amount within two weeks to prevent bank guarantee forfeiture. Despite the Appellate Tribunal's non-constitution, the court mandated compliance with statutory deposit requirements, ensuring the petitioner's right to appeal while protecting the revenue's interests.

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Issues:
1. Invocation of bank guarantee under Section 129 of CGST/SGST Act.
2. Applicability of appeal period and bank guarantee invocation.
3. Requirement of deposit for maintaining an appeal before the Appellate Tribunal.

Analysis:
1. The petitioner challenged the proceedings under Section 129 of the CGST/SGST Act, where a bank guarantee was produced to release goods and conveyance. The 1st Appellate Authority confirmed the original proceedings, leading to the petitioner's apprehension of the bank guarantee being invoked before the constitution of the State Appellate Tribunal.

2. The petitioner relied on a previous judgment to argue that the bank guarantee should not be invoked until the appeal period is over, emphasizing that the appeal period commences only when the Appellate Tribunal is constituted. The Circular No.132/2/2020-GST was cited to support this proposition.

3. The Senior Government Pleader contended that for maintaining an appeal before the Appellate Tribunal under Section 112 of the CGST/SGST Act, the petitioner must deposit an amount equivalent to 20% of the tax in dispute. The court held that despite the non-constitution of the Appellate Tribunal, the petitioner must deposit 20% of the tax amount in dispute to stay the invocation of the bank guarantee.

4. The court directed the petitioner to remit the required amount under Section 112(8)(b) of the CGST/SGST Act within two weeks for maintaining an appeal before the Appellate Tribunal. This payment was deemed as sufficient compliance with the provision, ensuring that the bank guarantee would not be invoked. The petitioner was not required to deposit any further amount for maintaining the appeal once the Tribunal is constituted.

5. The judgment concluded by specifying that failure to renew the bank guarantee within the stipulated time would allow the officer to invoke it. However, the amount paid by the petitioner was considered as meeting the requirements of Section 112(8)(b) of the CGST/SGST Act, and no additional deposit would be necessary for maintaining the appeal in the future.

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