Assessee entitled to refund of the amount recovered as the appellate tribunal has yet not been constituted

[CA Bimal Jain]

The Hon’ble Karnataka High Court in CULTGEAR PRIVATE LIMITED VERSUS COMMERCIAL TAX OFFICER (ENF) 53, SOUTH ZONE BENGALURU - 2024 (5) TMI 309 - KARNATAKA HIGH COURT, granted the liberty to the Assessee to file the appeal before the GSTAT as and when it is constituted. Also, The Hon’ble High Court directed the Revenue Department to refund the amount recovered from the Assessee subject to the furnishing of bank guarantee.

Facts:

Cultgear Private Ltd. (“the Petitioner”), filed a writ petition against order dated September 16, 2023 (“the Impugned Order”) seeking direction that the Petitioner be permitted to file the appeal against the Impugned Order within the extended period of limitation as and when the appellate tribunal is constituted. The Petitioner also prayed for direction that the refund of the amount recovered be sanctioned for which the Petitioner is willing to furnish the bank guarantee.

Issue:

Whether the Petitioner is entitled to refund of the amount recovered as the appellate tribunal has yet not been constituted?

Held:

The Hon’ble Karnataka High Court in CULTGEAR PRIVATE LIMITED VERSUS COMMERCIAL TAX OFFICER (ENF) 53, SOUTH ZONE BENGALURU - 2024 (5) TMI 309 - KARNATAKA HIGH COURT granted the liberty to the Petitioner to file the appeal before the GSTAT as and when it is constituted. The Hon’ble High Court granted the refund to the Petitioner subject to the furnishing of bank guarantee.

Our Comments:

The CBIC vide Circular No. 224/18/2024-GST dated July 11, 2024 clarified that the taxpayer needs to file an undertaking/ declaration with the jurisdictional proper officer that he will file appeal against the said order of the appellate authority before the Appellate Tribunal, as and when it comes into operation, within the timelines mentioned in section 112 of the CGST Act read with Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019. On providing the said undertaking and on payment of an amount equal to the amount of pre-deposit as per the procedure prescribed, the recovery of the remaining amount of confirmed demand as per the order of the appellate authority will stand stayed as per provisions of sub-section (9) of section 112 of CGST Act.

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