2026 (2) TMI 1103 - HC - GST

Pre-deposit under Section 112(8) requires verification; if confirmed, recovery stays under Section 112(9) and excess sums refunded.

Where a taxpayer contends that the statutory pre-deposit under Section 112(8) was made, authorities must accept and verify a representation of payment; if ... Pre-deposit u/s 112(8) - stay of recovery upon payment u/s 112(9) - pre-deposit pursuant to Section 107(6) - refund of excess recovery - representation and verification by the revenue authority - HELD THAT:- Since, it is the petitioner’s contention that the petitioner has made the pre-deposit in terms of Section 112(8) of the said Act of 2017 and therefore, no recovery ought to have been made, the petitioner should be afforded an opportunity to make appropriate representation before the respondent/ GST Authorities indicating to them that payment has been made by the petitioner towards satisfaction of the provisions of Section 112(8) of the said Act of 2017. To be precise any sum that may have been recovered from the petitioner beyond or in excess of the amounts required to be deposited by the petitioner at the two appellate stages i.e. under Section 107(6) and under Section 112(8) of the said Act of 2017 taken cumulatively, shall be refunded. It is made clear that this court has not gone into the merits of the petitioner’s contention and the respondent GST Authorities shall be free to take an informed decision in the matter. The respondent GST Authorities shall also be free to call for any clarification from the petitioner that may be required for the purpose of verification of the petitioner’s contentions. WPA stands disposed of. Issues: Whether, if the petitioner has made the pre-deposit required under Section 112(8) of the Act of 2017, the respondent GST authorities are obliged to treat recovery proceedings as stayed under Section 112(9) and refund any amounts recovered in excess of statutory pre-deposits at appellate stages.Analysis: The Court considered the petitioner's contention that a sum equivalent to the statutory pre-deposit under Section 112(8) of the Act of 2017 was deposited and that, consequently, recovery should not have been effected. The judgment frames the legal framework by reference to the pre-deposit obligations under Section 107(6) and Section 112(8) and the stay of recovery mandated by Section 112(9). The Court did not adjudicate the factual question whether the pre-deposit was actually made but directed that the petitioner be permitted to make an appropriate representation to the GST authorities setting out the payment and that the authorities verify the same. The Court required the GST authorities, if satisfied that the statutory pre-deposit was made, to give effect to Section 112(9) and to refund any sums recovered beyond the cumulative amounts required to be deposited under Section 107(6) and Section 112(8).Conclusion: The petitioner is entitled to have his representation considered and, if the GST authorities are satisfied that the pre-deposit under Section 112(8) has been made, the stay under Section 112(9) must be respected and any sums recovered in excess of the cumulative pre-deposits under Section 107(6) and Section 112(8) shall be refunded (in favour of the assessee).