2024 (8) TMI 988 - HC - GST

Taxpayer Wins Appeal Rights: Bank Guarantee Suffices for Challenge, Statutory Protection Upheld Under Section 107(6)

HC ruled that taxpayer could file appeal without additional pre-deposit after securing initial penalty amount via bank guarantee. The court directed ... Release of amount from the bank guarantee furnished by the petitioner - making payment of the pre-deposit for preferring the appeal which is a sum equal to 25 per cent of the penalty determined u/s 129(3) of the WBGST /CGST Act, 2017 - HELD THAT:- It is found that while the Coordinate Bench of this Court by its order in PARMAR SANDIP CHAMANBHAI VERSUS STATE TAX OFFICER, BUREAU OF INVESTIGATION, SOUTH BENGAL (HEAD QUARTER) & ORS. [2023 (8) TMI 1495 - CALCUTTA HIGH COURT] had directed the petitioner to make payment of Rs.10 lakhs, and the balance amount of the penalty by bank guarantee, the Coordinate Bench of this Court had also granted the petitioner, the liberty to file the appeal. It is further noticed that the petitioner by making payment of Rs.10 lakhs, and by securing the balance amount though bank guarantee and by execution of bond had also got the goods released. The moment the petitioner had made the aforesaid payment of Rs.10 lakhs and caused the bank guarantee to be executed in terms of the order dated 10th August 2023, the right of the petitioner to prefer an appeal crystallized into a full-fledged right which can neither be taken away nor can the respondents call upon the petitioner to make payment of any additional amount in terms of the proviso to Section 107(6) of the said Act. The petitioner, though may not be entitled to the refund of Rs.5,22,500/- or any part thereof, the respondents cannot at the same time withhold the right of the petitioner to prefer an appeal from the order passed under Section 129(3) of the said Act, inter alia, on the ground that the petitioner has not made a further pre-deposit of 25 per cent of the determination already made under Section 129 (3) of the said Act. In the event, the petitioner files an appeal with the respondents within 2 weeks from date, such appeal shall be heard and disposed of on merits without the respondents insisting for any further pre-deposit - Petition disposed off. Issues:1. Release of amount from bank guarantee for appeal pre-deposit2. Acceptance of appeal without pre-deposit3. Entitlement to appeal without further pre-depositAnalysis:The petitioner filed a writ petition seeking direction to release Rs.5,22,500 from the bank guarantee for the appeal pre-deposit under the WBGST/CGST Act, 2017. The petitioner had earlier challenged an order under Section 129(3) of the Act and was directed to deposit Rs.10 lakhs within 10 days for the appeal. The petitioner secured the penalty amount and got goods released. The petitioner requested modification of the order, stating no further payment was necessary for the appeal. However, the government pleader argued against relief, citing non-existent consignor and consignee. A Coordinate Bench had passed a conditional order on the matter, which the government pleader urged not to be interfered with.Upon hearing both parties, the judge noted the previous order directing the petitioner to pay Rs.10 lakhs and secure the balance via bank guarantee for the appeal. The petitioner had fulfilled these conditions and got the goods released, establishing the right to appeal without additional payment as per Section 107(6) of the Act. The judge opined that while the petitioner might not be entitled to a refund, the right to appeal could not be withheld for failure to make further pre-deposit. Consequently, the judge ruled that the appeal, if filed within two weeks, should be heard and decided on its merits without requiring any additional pre-deposit.In conclusion, the writ petition was disposed of with directions for all parties to act based on the official order copy downloaded from the Court's website.