Kerala HC ordered GST Officer to withhold invocation of Bank Guarantee to enable Taxpayer to Pursue Appellate Remedy

The Kerala High Court has ordered the State Tax Officer to keep the Bank Guarantee from being invoked so that the taxpayer can pursue an Appellate Remedy.

The petitioner, National Radio Electronic Corporation, contested an order made under Section 129 of the Central Items and Service Tax Act, 2017 that used the petitioner’s bank guarantee to seek the release of goods detained under Section 129(1) of the Act.

The petitioner’s limited relief claim is that the statute allows him to file an appeal within three months, and if he follows the terms stipulated in Section 107 of the CGST Act during that time, all proceedings for invocation of the bank guarantee or other proceedings will be stayed by virtue of the statutory prescriptions. The respondents, however, have proceeded to activate the bank guarantee, which he claims is due, even before the three-month term has expired.

The Government Pleader claimed that the bank guarantee has not been used and that the proper officer had no plans to use it before the appeal process ends.

In light of the petitioner’s three-month window to file an appeal, the single bench of Justice Bechu Kurian Thomas has determined that “I am of the opinion that it is necessary in the interests of justice that the bank guarantee is not triggered until the period for filing the appeal expires.” The order revealed that the respondent had used the bank guarantee in conjunction with the order under Section 129 of the CGST Act,” the court stated.

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