Balaram Halder Vs State of West Bengal & Ors. (Calcutta High Court)
Calcutta High Court has granted interim relief in the case of Mukul Lahiri v. A. Ray, staying the enforcement of a tax demand issued by the Appellate Authority. The petitioner challenged the order dated October 24, 2024, arguing that tax recovery should be halted until the GST Appellate Tribunal (GSTAT) becomes operational. The petitioner relied on Circular No. 224/18/2024-GST, issued by the Ministry of Finance on July 11, 2024, which provides guidelines for suspending recovery in such cases.
The circular clarifies that taxpayers appealing against an appellate order may stay recovery proceedings by making a pre-deposit under Section 112(8) of the CGST Act. It also mandates that taxpayers submit an undertaking to file an appeal before the Tribunal once it is constituted. If these conditions are met, tax authorities cannot proceed with recovery under Section 112(9). However, if the taxpayer fails to comply, the demand can be enforced under the existing provisions of the CGST Act.
After hearing both parties, the High Court acknowledged that the GST Appellate Tribunal is yet to be established, which creates procedural hurdles for taxpayers. The court granted an unconditional stay on the appellate order’s demand for two weeks. Further, it ruled that if the petitioner deposits an additional 10% of the disputed tax amount within this period—beyond what was already deposited under Section 107(6)—the stay would remain in effect until the final disposal of the writ petition.
