2021 (4) TMI 141 - HC - GST

Invocation of bank guarantee furnished by the petitioner for release of the goods - petitioner intend in preferring an appeal under Section 107 of the CGST Act - HELD THAT - In terms of Section 107 of the CGST Act read with Rule 108 of the Goods and Services Tax Rules, the petitioner has time of three months to challenge the order at Ext.P3 which is received by the petitioner on 20.03.2021. The petitioner is intending to file statutory appeal within the prescribed period of limitation. If the petitioner files statutory appeal challenging the order at Ext.P3 within the prescribed period of limitation, then the respondents should not invoke bank guarantee furnished by the petitioner for a period of one week after filing of the statutory appeal - petition disposed off.

Summary

Issues:
1. Enforcement of bank guarantee pending appeal under Section 107 of the CGST Act.

Analysis:
The judgment pertains to a case where goods were released to the petitioner under a release order upon furnishing a bank guarantee. Subsequently, an order was issued directing the petitioner to pay IGST tax. The petitioner sought to challenge this order by filing a statutory appeal under Section 107 of the CGST Act within the prescribed three-month period. The petitioner requested that the respondents be restrained from encashing the bank guarantee until the appeal is filed.

The petitioner's counsel argued that the bank guarantee should not be invoked by the respondents until the statutory appeal is filed, as per the provisions of Section 107 of the CGST Act and Rule 108 of the Goods and Services Tax Rules. On the other hand, the Government Pleader opposed the writ petition, emphasizing that the amount had been determined under the order in question.

The court, after considering the submissions and relevant legal provisions, disposed of the writ petition with specific directions. It ruled that if the petitioner files a statutory appeal challenging the order within the prescribed time limit, the respondents are prohibited from invoking the bank guarantee for one week after the appeal is filed. The judgment instructed the Standing Counsel to communicate this directive to ensure compliance by the concerned respondent.

In conclusion, the judgment provides clarity on the enforcement of a bank guarantee pending an appeal under the CGST Act. It underscores the importance of adhering to statutory timelines for filing appeals and sets out specific instructions to safeguard the petitioner's interests regarding the bank guarantee until the appeal process is initiated.