2025 (1) TMI 120 - HC - GST

Assessee must deposit 10% of disputed tax amount under amended Section 112 CGST Act for stay of recovery proceedings

M/s Maa Sunaina Construction Private Limited Versus The Union of India through the Secretary New Delhi, The State of Bihar through the Principal Secretary Cum Commissioner, The Assistant Commissioner State Tax, The Additional Commissioner Patna

Patna HC ruled that assessee must deposit 10% of disputed tax amount (reduced from 20% per amended Section 112 of CGST Act, 2017 effective 01.11.2024) to ... Amendment made to Section 112 of the Central Goods and Services Tax Act, 2017 substituting “twenty per cent” pre deposit to “ten per cent” for maintaining an appeal before the Goods and Services Tax Tribunal - HELD THAT:- As of now pre-deposit has been reduced to “ten per cent” but however, the same is made effective only from 01.11.2024. It is an admitted position that the GST Tribunals have not been constituted as yet and there is no possibility of an appeal being filed prior to 01.11.2024. In such circumstance we direct that the assessee on payment of “ten per cent” of the tax amounts in dispute shall be entitled to stay of recovery till the Tribunal is constituted and an appeal is filed within such term as provided therein. Petition disposed off. In the case before the Patna High Court, the issue concerned an amendment to Section 112 of the Central Goods and Services Tax Act, 2017, which reduced the pre-deposit requirement for filing an appeal before the Goods and Services Tax Tribunal from 'twenty per cent' to 'ten per cent,' effective from 01.11.2024. However, since the GST Tribunals have not yet been constituted, the court addressed the interim situation.The court directed that the assessee, upon payment of 'ten per cent' of the disputed tax amount, would be entitled to a stay of recovery until the Tribunal is constituted and an appeal is filed. This decision aligns with the judgment in SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.The court laid out specific terms for the writ petition:1. The petitioner must deposit 10% of the disputed tax amount to receive the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act. The non-constitution of the Tribunal should not deprive the petitioner of this benefit, and recovery actions will be stayed.2. The stay is not indefinite; the petitioner must file an appeal under Section 112 of the B.G.S.T. Act once the Tribunal is operational, adhering to statutory requirements.3. If the petitioner does not file an appeal within the specified period after the Tribunal's constitution, the authorities may proceed according to law.4. Upon compliance with the order and payment of 10% of the remaining disputed tax, any bank account attachment related to the demand will be released.The writ petition was disposed of with these directions.