2024 (12) TMI 1499 - HC - GST

Amendment made to Section 112 of the Central Goods and Services Tax Act, 2017 substituting twenty per cent pre deposit to ten per cent for maintaining an appeal before the Goods and Services Tax Tribunal - non-constitution of Tribunal - HELD THAT - As of now pre-deposit has been reduced to ten per cent but however, the same is made effective only from 01.11.2024. It is an admitted position that the GST Tribunals have not been constituted as yet and there is no possibility of an appeal being filed prior to 01.11.2024. In such circumstance, we direct that the assessee on payment of ten per cent of the tax amounts in dispute shall be entitled to stay of recovery till the Tribunal is constituted and an appeal is filed within such term as provided therein. Subject to deposit of a sum equal to 10 percent of the amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act. The petitioner cannot be deprived of the benefit, due to non-constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed. Petition disposed off.

Summary

In the case before the Patna High Court, the issue revolves around the amendment to Section 112 of the Central Goods and Services Tax Act, 2017, which reduces the pre-deposit requirement for appeals to the Goods and Services Tax Tribunal from "twenty per cent" to "ten per cent." However, this amendment is effective from 01.11.2024, and the GST Tribunals have not yet been constituted. The Court, referencing the precedent set in SAJ Food Products Pvt. Ltd. vs. The State of Bihar, ruled that the petitioner could deposit ten per cent of the disputed tax amount to obtain a stay on recovery until the Tribunal is constituted and an appeal is filed.

The Court's judgment includes the following key directives:

1. The petitioner must deposit ten per cent of the disputed tax amount to receive a stay of recovery under Sub-Section (9) of Section 112 of the B.G.S.T. Act. The non-constitution of the Tribunal by the respondents should not deprive the petitioner of this benefit.

2. The stay of recovery is not indefinite. The petitioner is required to file an appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and operational.

3. If the petitioner does not file an appeal within the specified period after the Tribunal's constitution, the respondent authorities may proceed according to the law.

4. Upon compliance with the order and payment of ten per cent of the disputed tax, any bank account attachments due to the demand will be released.

The writ petition was disposed of with these directions and observations.