In a significant ruling the Madras High Court has held that there is no justification for bank attachments on remittance of pre deposit.
The petitioner, M/s V R S Traders filed a writ petition under Article 226 of the Constitution of India. The writ of mandamus was invoked by the petitioner. The writ petition was filed seeking direction from the Court to the first respondent, The Commissioner of State Taxes to release the attachment of the bank account of VRS Traders and its proprietor with Tamil Nadu Mercantile Bank, Poonamallee Branch.
The petitioner suffered an order of assessment dated 10.05.2022 and stated that the first appeal is being contemplated, which is to be filed within a period of one week from today. In such an event, the petitioner pleaded that the respondents would have to facilitate remittance of mandatory statutory pre-deposit, for which purpose.
The concept of pre-deposit has been introduced under GST with a basic purpose of stoppage of unnecessary adjudication which is generally preferred by the appellant only to delay the demand. Due to the pre-deposit provision, there are major chances that only genuine appeal will be filed.
GST law requires the appellant to fulfil the pre-deposit provisions. It is important to note that once the prescribed pre-deposit is done, an automatic stay will be granted, under the GST law, for the remaining amount.
Pre-deposit provisions are to be satisfied while filing an appeal before both the first appellate authority and tribunal. Both the provisions are briefly explained in the present article.
Justice Anita Sumanth observed that “The petitioner confirms today that appeal has been filed and that the respondents had duly enabled the remittance of pre-deposit as per the provisions of Section 107 of the Tamil Nadu Goods and Service Tax Act, 2017. Upon remittance of pre-deposit of 10%, the balance shall remain stayed and hence there is no further justification for continuation of the bank attachments. ”The Court added that the bank attachments shall stand lifted.
G Natarajan appeared for the petitioner and V Prasanth Kiran, Government Advocate appeared for the respondents.
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