Pre-deposit requirement in GST appeal: 25% deposit and bank attachment lifted subject to set-off and verification, relief granted despite limitation expiry

Pre-deposit of disputed tax was imposed as a condition for entertaining de novo proceedings; the court directed deposit of 25% of the disputed tax and granted discretionary relief to vacate a bank attachment subject to that compliance. Amounts already recovered or paid by the petitioner against the liability are to be verified and set off against the 25% pre-deposit; if recoveries exceed 25%, no additional pre-deposit is required. The respondents may resume recovery if the petitioner fails the stipulated conditions. The court exercised discretion despite expiry of the statutory appeal limitation period.

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Issues: Whether the impugned GST recovery order dated 25.02.2025 should be quashed and the matter remitted for fresh consideration on merits subject to a pre-deposit by the petitioner.

Analysis: The writ petition challenges the impugned order confirming tax demand and records that the limitation for statutory appeal has expired. The petitioner contends that excess ITC was reversed in subsequent returns and portions of the disputed tax were already recovered/paid. The Court notes precedents permitting quashment and remand where statutory remedies are time-barred, subject to safeguards to protect revenue interests. Balancing the competing interests, the Court examines the adequacy of a conditional pre-deposit and requirement to permit fresh, de novo consideration of the show cause notice on merits within a specified timeframe.

Conclusion: The impugned order is quashed and the matter is remitted for fresh consideration on merits subject to the petitioner depositing 25% of the disputed tax from the Electronic Cash Register within thirty days and filing a reply with supporting documents; bank attachment shall be vacated upon compliance and amounts already recovered shall be set off against the pre-deposit. This outcome is in favour of the Assessee.

Ratio Decidendi: Where an appeal period has lapsed and the court exercises writ jurisdiction, the appropriate remedy is to quash the impugned order and remit the matter for fresh consideration on merits subject to a reasonable pre-deposit as a condition to protect revenue, with set-off of amounts already recovered.

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