Bhupal Singh Kanwal vs. State Of Uttarakhand

Held

The Court modified the impugned order passed by the learned Single Judge. It held that the appellant is required to deposit only 10% of the amount assessed in each of the three orders dated 23.09.2022, 26.09.2022, and 01.10.2022. The Court reasoned that this aligns with the provisions of Section 107(6) of the Uttarakhand Goods and Services Tax Act, 2017, which permits payment of only 10% of the disputed tax amount for preferring an appeal. Consequently, the Court stayed the operation of the assessment orders and directed the de-freezing of the appellant's bank account. The ratio decidendi is that pre-deposit requirements for appeals under GST legislation must be strictly adhered to, and demanding security beyond the statutory pre-deposit is impermissible.

Facts

The appellant, Bhupal Singh Kanwal, is challenging three orders dated 23.09.2022, 26.09.2022, and 01.10.2022, issued under Section 73(1) of the Uttarakhand Goods and Services Tax Act, 2017. These orders assessed tax demands of Rs. 1,86,126.50, Rs. 5,31,825.00, and Rs. 96,790.00 respectively. The appellant had filed a writ petition challenging these demands. The learned Single Judge, in an order dated 04.03.2024, directed the appellant to furnish a bank guarantee for the entire disputed amount. The appellant then filed a Special Appeal against this order, seeking condonation of a 61-day delay, which was allowed.

Key Issues

1. Whether the learned Single Judge erred in directing the appellant to furnish a bank guarantee for the entire disputed tax amount, contrary to the provisions of Section 107(6)(b) of the Uttarakhand Goods and Services Tax Act, 2017? The appellant argued that Section 107(6)(b) mandates payment of only 10% of the disputed tax amount before the Appellate Authority, and therefore, requiring a bank guarantee for the entire amount is illegal. The respondents did not record any specific arguments in the judgment.