Varahamurthi Flexirub Industries PVT . LTD. vs. State Tax Officer Squad-Vii
Held
The Court held that the direction to encash the bank guarantee was illegal, considering the petitioner had three months under Section 78 of the GST Act to deposit the amount and intended to file an appeal under Section 107. The direction to the bank was quashed, but the petitioner was directed to continue the bank guarantee until the appeal was filed.
Facts
The petitioner, having been issued an order confirming a penalty, challenged the State Tax Officer's direction to the second respondent bank to encash a bank guarantee and forward the amount to the tax authority. The petitioner contended that they had time to deposit the amount and intended to file an appeal.
Key Issues
The key legal issue was whether the tax authority could direct the encashment of a bank guarantee for a confirmed penalty before the statutory period for payment or filing an appeal, as provided under Sections 78 and 107 of the GST Act, had expired.
Sections Cited
Section 107, Section 78
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR TUESDAY, THE 16TH DAY OF FEBRUARY 2021 / 27TH MAGHA,1942 WP(C).No.3900 OF 2021(J) PETITIONER: VARAHAMURTHI FLEXIRUB INDUSTRIES PVT.LTD., S F NO.205, PADUVAMPALI, SUTUR TALUK, COIMBATORE, TAMIL NADU-641 659, REPRESENTED BY ITS SENIOR ACCOUNTANT AND AUTHORISED SIGNATORY A.KODEESWARAN. BY ADV. SRI.PREMJIT NAGENDRAN RESPONDENTS: 1 STATE TAX OFFICER SQUAD-VII OFFICE OF THE DEPUTY COMMISSIONER OF STATE TAX, INTELLIGENCE KERALA SGST DEPARTMENT, PALAKKAD-678 001. 2 BRANCH MANAGER, STATE BANK OF INDIA, ANNAUR BRANCH, SF NO.280/1, SATHY MAIN ROAD, ANNUR, COIMBATORE -641 653. OTHER PRESENT: SMT.THUSHARA JAMES, GOVT. PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16.02.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P.(C) No.3900/2021 2 JUDGMENT Dated this the 16th day of February 2021 Heard both sides. The petitioner, who has suffered an order of confirmation of penalty at the hands of the respondent-State Tax Officer, is challenging the action of the said authority in directing the 2nd respondent-Bank to invoke bank guarantee and to forward the demand draft of the valu
The judgment continues below.
Read the full judgment
A free account opens 10 full GST judgments a month (one account works on both bharattax.net and this site). Re-reading one you have already opened does not count again.
The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.
Reproduced from the public record of the Kerala High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.