M/S. Sonali Event PVT. LTD. vs. The Union Of INDIA

Held

The Court held that the petitioner is entitled to the statutory benefit of stay of recovery upon depositing ten percent of the tax amount in dispute, in addition to any amount already deposited under Section 107(6) of the B.G.S.T. Act. The Court reasoned that the petitioner should not be deprived of this benefit due to the respondents' failure to constitute the GST Tribunal. The recovery of the balance amount and any steps taken in this regard were ordered to be stayed. However, the Court clarified that this stay is not open-ended. The petitioner must file their appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional. If the petitioner fails to file the appeal within the stipulated period after the Tribunal's constitution, the respondent authorities will be at liberty to proceed as per law. The Court also directed the release of any attachment on the petitioner's bank account if the ten percent pre-deposit is made.

Facts

The petitioner, M/s. Sonali Event Pvt. Ltd., filed a writ petition before the Patna High Court. The petition concerns the pre-deposit requirement for filing an appeal before the Goods and Services Tax Tribunal. An amendment to Section 112 of the Central Goods and Services Tax Act, 2017, reduced the pre-deposit from twenty percent to ten percent. However, this amendment was made effective from November 1, 2024. The GST Tribunals have not yet been constituted. The petitioner sought relief in light of these circumstances, referencing a previous judgment in SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Key Issues

1. Whether the petitioner is entitled to the benefit of a reduced pre-deposit of ten percent for filing an appeal before the Goods and Services Tax Tribunal, given that the amendment is effective from November 1, 2024, and the Tribunal is not yet constituted? Petitioner's contention: The petitioner argued that since the GST Tribunals are not constituted and the amendment reducing the pre-deposit to ten percent is effective from November 1, 2024, they should be allowed to deposit ten percent of the disputed tax amount and have recovery stayed, similar to the relief granted in previous cases like SAJ Food Products Pvt. Ltd. They contended they should not be prejudiced by the delay in the constitution of the Tribunal by the respondents. Revenue's contention: The judgment does not record any specific arguments made by the respondents.