Assessee entitled to refund of the amount recovered as the appellate tribunal has yet not been constituted

Last updated: 19 July 2024

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Quick Summary

The Karnataka High Court has ruled that an assessee is entitled to a refund of amounts recovered, provided they furnish a bank guarantee. This decision comes as the Goods and Services Tax Appellate Tribunal (GSTAT) has not yet been constituted. The court has also permitted the assessee to file their appeal before the GSTAT once it is established.

Court :
Karnataka High Court

Brief :
The Hon'ble Karnataka High Court in Cultgear Private Ltd. v. Commercial Tax Officer [W. P. No. 6795 of 2024 dated April 02, 2024], granted the liberty to the Assessee to file the appeal before the GSTAT as and when it is constituted. Also, The Hon'ble High Court directed the Revenue Department to refund the amount recovered from the Assessee subject to the furnishing of bank guarantee.

Citation :
W. P. No. 6795 of 2024 dated April 02, 2024

The Hon'ble Karnataka High Court in Cultgear Private Ltd. v. Commercial Tax Officer [W. P. No. 6795 of 2024 dated April 02, 2024], granted the liberty to the Assessee to file the appeal before the GSTAT as and when it is constituted. Also, The Hon'ble High Court directed the Revenue Department to refund the amount recovered from the Assessee subject to the furnishing of bank guarantee.

Facts

Cultgear Private Ltd. ("the Petitioner"), filed a writ petition against order dated September 16, 2023 ("the Impugned Order") seeking direction that the Petitioner be permitted to file the appeal against the Impugned Order within the extended period of limitation as and when the appellate tribunal is constituted. The Petitioner also prayed for direction that the refund of the amount recovered be sanctioned for which the Petitioner is willing to furnish the bank guarantee.

Issue

Whether the Petitioner is entitled to refund of the amount recovered as the appellate tribunal has yet not been constituted?

Held

The Hon'ble Karnataka High Court in W.P. No. 6795 of 2024 granted the liberty to the Petitioner to file the appeal before the GSTAT as and when it is constituted. The Hon'ble High Court granted the refund to the Petitioner subject to the furnishing of bank guarantee.

Our Comments

The CBIC vide Circular No. 224/18/2024-GST dated July 11, 2024 clarified that the taxpayer needs to file an undertaking/ declaration with the jurisdictional proper officer that he will file appeal against the said order of the appellate authority before the Appellate Tribunal, as and when it comes into operation, within the timelines mentioned in section 112 of the CGST Act read with Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019. On providing the said undertaking and on payment of an amount equal to the amount of pre-deposit as per the procedure prescribed, the recovery of the remaining amount of confirmed demand as per the order of the appellate authority will stand stayed as per provisions of sub-section (9) of section 112 of CGST Act.

Judgment copy has been attached

FAQ :

The Karnataka High Court ruled that an assessee can file an appeal before the GSTAT once it is constituted and is entitled to a refund of amounts already recovered, subject to providing a bank guarantee.

Yes, the assessee can get a refund of the amount recovered, but they must furnish a bank guarantee as directed by the High Court.

The assessee has been granted permission to file their appeal before the GSTAT as and when the tribunal is constituted.

The condition for receiving the refund is that the assessee must furnish a bank guarantee.