Supreme Court stays recovery under Section 122(1) CGST Act, allows 25% deposit pending appeal under Section 107

The SC granted leave and stayed recovery of the disputed amount under Section 122(1) of the CGST Act, 2017, subject to the appellant depositing 25% of the demand with the GST Department. The HC had previously declined to entertain the writ petition, directing the petitioner to pursue appellate remedies under Section 107 of the CGST Act. The SC's order allows interim relief pending appeal, addressing the retrospective application of Section 122(1A) effective from 01.01.2021 for assessment years 2017-2020.

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The Supreme Court of India, through an order by Justices Pankaj Mithal and Prasanna B. Varale, addressed two primary contentions regarding the Central Goods and Services Tax Act, 2017 ("the Act"). The petitioner argued that Section 122(1) of the Act is inapplicable as he is a non-taxable person, and that Section 122(1A), effective from 01.01.2021, cannot be applied retrospectively to Assessment Years 2017-2020. The Court granted leave and stayed recovery of the amount subject to the petitioner depositing 25% of the demand with the GST Department via Electronic or Cash Ledger.

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