2024 (5) TMI 309 - HC - GST

Revenue ordered to refund Rs.11,21,840 from bank guarantee within one month, petitioner must provide fresh guarantee

Karnataka HC directed revenue to refund Rs.11,21,840 encashed from bank guarantee within one month. Court ordered petitioner to provide fresh bank ... Statutory appeal - constitution of the Appellate Tribunal (GSTAT) - extension of limitation pending constitution of Appellate Tribunal - refund of amount encashed against bank guarantee subject to furnishing fresh bank guarantee - liberty to prefer appeal upon constitution of GSTATRefund of amount encashed against bank guarantee subject to furnishing fresh bank guarantee - Respondent directed to refund the sum encashed from the petitioner's bank guarantee on specified conditions. - HELD THAT: - The Court, after noting the parties' submissions and the material on record, directed the respondent to refund the amount encashed on 01.02.2024. The refund is to be effected within one month. Immediately upon refund, the petitioner is required to furnish a fresh bank guarantee within one week thereafter, the fresh guarantee to remain valid for one year. The order balances the petitioner's entitlement to restoration of the encashed amount with the respondent's security concern by conditioning refund on prompt re furnishing of a bank guarantee. [Paras 7]Respondent to refund the encashed amount within one month; petitioner to furnish a fresh one year bank guarantee within one week of refund.Statutory appeal - constitution of the Appellate Tribunal (GSTAT) - extension of limitation pending constitution of Appellate Tribunal - liberty to prefer appeal upon constitution of GSTAT - Petitioner granted liberty to file a statutory appeal challenging the impugned order after constitution of the GSTAT within the extended period prescribed by the relevant circular. - HELD THAT: - Relying on the Circular dated 18.03.2020 (which explains that the time limit for filing appeals to the Appellate Tribunal will be counted from the date on which the President or State President enters office), the Court recognised that the appellate forum (GSTAT) has not been constituted and that the limitation period is accordingly to be extended. The Court therefore reserved liberty for the petitioner to prefer a statutory appeal against the impugned order upon constitution of the GSTAT, within the extended period of limitation as stipulated in the Circular. This preserves the petitioner's appellate remedy without depriving the respondent of interim security by imposing the bank guarantee condition tied to the refund. [Paras 4, 5, 7]Liberty reserved to the petitioner to prefer a statutory appeal upon constitution of GSTAT within the extended period of limitation provided by the Circular dated 18.03.2020.Final Conclusion: Petition disposed by directing refund of the amount encashed on 01.02.2024 within one month, subject to the petitioner furnishing a fresh one year bank guarantee within one week of refund; petitioner granted liberty to file a statutory appeal on constitution of GSTAT within the extended limitation period as per the Circular dated 18.03.2020. Issues involved: Writ of mandamus for withdrawal of recovery proceedings, writ of certiorari to set aside impugned order, refund of amount, constitution of GSTAT for appeal, circular dated 18.03.2020 on appeal process.The petitioner sought a writ of mandamus to direct the Respondent to withdraw recovery proceedings by issuing a demand draft equivalent to the Bank Guarantee amount. Additionally, a writ of certiorari was requested to set aside the impugned order dated 16.09.2023. The petitioner also sought various other reliefs, including the refund of a specific amount and the option to challenge the impugned order through a statutory appeal once the GSTAT is constituted.The learned counsel for the petitioner argued that due to the non-constitution of the GSTAT, the petitioner was unable to appeal the impugned order. The counsel requested the court to allow the appeal once the GSTAT is established. The respondent, represented by learned AGA, agreed to refund the specified amount to the petitioner upon the condition of furnishing a bank guarantee within a week from the refund date.The Circular dated 18.03.2020 provided guidelines on the appeal process in the absence of the appellate tribunal. It clarified the procedures for making appeals under the Central Goods and Services Tax Act, emphasizing the role of the Appellate Authority and the Appellate Tribunal in the appeal process.The court, considering the circumstances, directed the respondent to refund the specified amount encashed earlier within a month. It further instructed the petitioner to provide a fresh bank guarantee within a week of the refund, valid for a year. The petitioner was granted liberty to file a statutory appeal challenging the impugned order once the GSTAT is constituted, following the extended period of limitation as per the circular dated 18.03.2020. The petition was disposed of accordingly.