Kerala HC: No encashment of bank guarantee until expiry of 3 months from Order

Last updated: 06 August 2021

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The Kerala High Court has ruled that a bank guarantee cannot be encashed until three months have passed from the date of an order. This decision, made in favour of Varahamurthi Flexirub Industries (P.) Ltd., acknowledges the petitioner's right to deposit disputed amounts within the three-month period stipulated by the CGST Act. Consequently, the court set aside the order to invoke the bank guarantee and directed the petitioner to maintain it until an appeal is filed.

Court :
Kerala High Court

Brief :
In the matter of Varahamurthi Flexirub Industries (P.) Ltd. v. State Tax Officer, Squad-VII, Palakkad [W.P. (C) No. 3900 of 2021 (J) dated February 16, 2021], Varahamurthi Flexirub Industries (P.) Ltd. ('the Petitioner') received an order of confirmation of penalty from the State Tax Officer ('the Respondents'). The Petitioner had challenged the order of the Respondents in directing bank to invoke bank guarantee and to forward demand draft of value of said bank guarantee.

Citation :
W.P. (C) No. 3900 of 2021 (J) dated February 16, 2021

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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