Demand Notice cannot be enforced during the pendency of the Stay Application

Last updated: 25 November 2023

Save Share

Quick Summary

The Kerala High Court has ruled that a demand notice cannot be enforced while a stay application is pending. In a case involving M/s Mathew Scaria, the court directed the Revenue Department to decide on the stay application within one month. Crucially, the Revenue Department was also ordered not to proceed with enforcing the demand notice during this period.

Court :
Kerala High Court

Brief :
The Hon'ble Kerala High Court in the case M/s. Mathew Scaria v. Deputy Commissioner of State Tax and Ors. [WP(C) 33099 of 2023 dated October 16, 2023] disposed of the writ petition, thereby directing the Revenue Department to dispose Stay Application within one month and not enforce the proceeding of Demand Notice during the pendency of the Stay Application.

Citation :
WP(C) 33099 of 2023 dated October 16, 2023

The Hon'ble Kerala High Court in the case M/s. Mathew Scaria v. Deputy Commissioner of State Tax and Ors. [WP(C) 33099 of 2023 dated October 16, 2023] disposed of the writ petition, thereby directing the Revenue Department to dispose Stay Application within one month and not enforce the proceeding of Demand Notice during the pendency of the Stay Application.

Facts

The Revenue Department ("the Respondent") passed Assessment Order dated January 9, 2023, against M/s Mathew Scaria ("the Petitioner"). The Petitioner filed an Appeal along with Stay Application dated February 2, 2023 ("Stay Application") under the Kerala Goods and Services Tax Act, 2017 ("the KGST Act") for AY 2020-2021. The Respondent further issued a Demand Notice dated August 18, 2023, during the pendency of the Appeal and Stay Application, for recovery of the GST amount from the Petitioner.

Aggrieved by the conduct of the Respondent, the Petitioner filed an Appeal before the Hon'ble High Court contending that no action has been taken on the Appeal and Stay Application, while a Demand Notice has been issued against the Petitioner during the pendency of the Appeal and Stay Application.

Issue

Whether Demand Notice can be enforced during the pendency of the Stay Application?

Held

The Hon'ble Kerala High Court in WP(C) No. 33099 of 2023 disposed of the writ petition and directed that, the Respondent to consider and pass an order on the Stay Application of the Petitioner within one month. Further, refrain the Respondent from enforcing the Demand Notice within the stipulated period.

FAQ :

No, the Kerala High Court has ruled that a demand notice cannot be enforced during the pendency of a stay application.

The court directed the Revenue Department to consider and pass an order on the stay application within one month.

The Revenue Department is prohibited from enforcing the demand notice during the period the stay application is being considered.

The ruling came after M/s Mathew Scaria filed a writ petition because a demand notice was issued while their appeal and stay application were pending.