Bum Bum Corporation vs. The State Of Madhya Pradesh

Held

The Court held that to enable the petitioner to avail the benefit of Circular dated 11.07.2024, the petition would be disposed of with a direction to unblock the petitioner's Electronic Credit Ledger. This unblocking is to facilitate the pre-deposit of the statutory amount. Upon the petitioner making the pre-deposit and complying with other requirements of the Circular, no further coercive action would be taken against them pursuant to the order dated 25.01.2024 for the tax period 01.04.2018 to 31.03.2019. Any further coercive action taken prior to this pre-deposit, including the blocking of the Electronic Credit Ledger and holding of the bank account, would be deemed quashed. The Court clarified that the petitioner must first make the pre-deposit from the Electronic Credit Ledger, and only then would they be permitted to operate it and have the bank account hold lifted. The Court explicitly stated it did not consider or comment on the merits of the assessment proceedings. It further clarified that if the petitioner fails to comply with the Circular or avail the remedy of appeal, the respondent authorities would be at liberty to proceed further as per law.

Facts

The petitioner, Bum Bum Corporation, is aggrieved by coercive measures taken for recovery of an alleged outstanding demand for the period 2018-19. Proceedings under Section 74 of the CGST Act were initiated, leading to a demand of Rs.38,93,378/-. This demand was challenged before the appellate authority, which by an order dated 25.01.2024, set aside the original demand but created a fresh demand of Rs.4,54,574/- plus interest and penalty, totaling Rs.14,69,451/-. The petitioner wishes to appeal this order before the CGST Appellate Tribunal but cannot due to the Tribunal not functioning. In the interim, the petitioner's Electronic Credit Ledger has been blocked and bank account put on hold.

Key Issues

1. Whether the petitioner can be compelled to pay the entire demand or a portion thereof, given the non-functioning of the CGST Appellate Tribunal and the availability of a circular providing interim relief? (Mixed question of law and fact, concerning Section 112 of the CGST Act and Circular dated 11.07.2024). Petitioner's arguments: The petitioner contends that they are willing to deposit the statutory pre-deposit amount as per Section 112 of the CGST Act. They rely on Circular dated 11.07.2024, which allows taxpayers to make pre-deposit payments from their Electronic Credit Ledger and file an undertaking to appeal when the Tribunal becomes functional, to avoid coercive recovery measures. The petitioner argues that their Electronic Credit Ledger balance is sufficient for the pre-deposit. Revenue's arguments: The judgment records no specific arguments from the respondents/State.