2018 (7) TMI 1636 - HC - GST

Availability of alternative remedy of appeal - invocation of Bank Guarantee - Held that - In terms of Section 107 of the Act, read with Rule 108 of the Goods and Services Tax Rules, to appeal, the petitioner has three months time from the date of Ext.P8 impugned order. The 7th respondent is the appellate authority - Because the petitioner has three months time to appeal, it may be inequitable for the authority to invoke the bank guarantee before the petitioner could exhaust its appeal remedy-within the period of limitation, though. The respondent will not invoke the bank guarantee for three months - petition disposed off.

Summary

Issues:
1. Threat of invoking bank guarantee by the respondent before the petitioner could invoke appellate remedy.
2. Availability of alternate efficacious remedy for the petitioner.

Analysis:
1. The petitioner, a company dealing in paints, faced proceedings under the Central Goods and Services Tax Act, resulting in the seizure of paint mixing machinery by the authorities. In response, the petitioner provided a bank guarantee and a security bond before the 1st respondent to secure the release of the machinery and transport vehicle. However, upon contemplating invoking the appellate remedy due to adverse orders, the petitioner raised a grievance that the 1st respondent threatened to invoke the bank guarantee before the petitioner could exercise the appellate remedy. The petitioner argued that the appellate forum was recently established, and procedural formalities were still pending, rendering the petitioner's statutory remedies illusory if the bank guarantee was invoked prematurely.

2. The learned Government Pleader contended that the petitioner had an efficacious alternate remedy available and could approach the appellate authority. The court considered the provisions of Section 107 of the Act, along with Rule 108 of the Goods and Services Tax Rules, which granted the petitioner three months' time from the date of the impugned order (Ext.P8) to file an appeal before the 7th respondent, the appellate authority. Recognizing the potential inequity in invoking the bank guarantee before the petitioner could exhaust its appeal remedy within the statutory limitation period, the court disposed of the Writ Petition by directing that the respondent should not invoke the bank guarantee for three months. During this period, the petitioner was advised to pursue interim protection before the appellate authority pending appeal adjudication, ensuring the petitioner's right to appeal was preserved.

This judgment from the Kerala High Court addressed the critical issue of safeguarding the petitioner's right to appeal by restraining the respondent from prematurely invoking the bank guarantee, allowing the petitioner the opportunity to pursue statutory remedies within the stipulated timeframe. The court's decision balanced the interests of both parties while upholding the principles of natural justice and fairness in tax proceedings under the Central Goods and Services Tax Act.