2024 (2) TMI 352 - HC - GST

Taxpayer Wins Partial Relief: Interim Stay on Tax Demand After Challenging CGST Act Section 107(4) Appeal Restrictions

HC granted interim relief in tax appeal case. Petitioner challenged CGST Act Section 107(4) and a notification restricting appeal filing timelines. Court ... Interim stay - restriction on appellate authority's power to condone delay - limitation extension by notification under Section 148 - deposit as condition for interim relief - security for recoveryInterim stay - deposit as condition for interim relief - security for recovery - Interim relief pending challenge to validity of Section 107(4) of the CGST/RGST Act, 2017 and notification dated 02.11.2023. - HELD THAT: - The High Court recorded that the petitioner has questioned the validity of Section 107(4) and the notification dated 02.11.2023 and is prepared to make a deposit. Respondent was granted time to file instructions and reply. As an interim measure and until the next date, the Court directed that if the petitioner deposits 12.5% of the amount of the 'tax in dispute' within one week, recovery or action in respect of the remaining amount pursuant to the demand dated 21.07.2023 shall remain stayed. For the balance amount, the petitioner must furnish solvent security to the satisfaction of the Assistant Commissioner, State Tax, Circle-D, Ward-2, Jodhpur Zone-I. The order was passed in the presence of counsel for the respondents, who remain free to seek vacation of the interim order after filing their response.Interim stay granted on conditions: deposit of 12.5% within one week and submission of solvent security for the remaining amount; respondents permitted to seek vacation after filing reply.Final Conclusion: Writ petition listed for further hearing on 21.02.2024; interim relief granted conditionally by stay of recovery subject to deposit and security, without adjudication on the merits of the challenge to Section 107(4) or the impugned notification. Issues involved: Challenge to validity of provisions of Section 107(4) of the CGST/RGST Act, 2017 and notification dated 02.11.2023 issued under Section 148 of the Act.The petitioner challenged the validity of Section 107(4) of the Act, contending that it restricts the appellate authority's right to condone appeal filing delay by only one month. Additionally, the petitioner raised concerns about the notification dated 02.11.2023, arguing that the specified date lacked rationale as it led to appeals being time-barred even for cases where orders were issued after 31.03.2023.The petitioner expressed willingness to deposit 12.5% of the disputed tax amount as per the notification dated 02.11.2023. The respondents' counsel requested time to provide instructions and file a reply in the matter.The court granted the respondents' request for additional time and scheduled the petition for listing on 21.02.2024. Meanwhile, if the petitioner deposits 12.5% of the tax in dispute within a week, the recovery or action regarding the remaining amount from the demand dated 21.07.2023 will be stayed. For the remaining amount, the petitioner must provide solvent security to the satisfaction of the Assistant Commissioner, State Tax, Circle-D, Ward-2, Jodhpur Zone-I.An interim order was issued in the presence of the respondents' counsel, who were informed that they could apply to vacate the interim order after submitting a response to the writ petition.