Varahamurthi Flexirub Industries (P.) Ltd. v. State Tax Officer, Squad-VII, Palakkad – [2021] 128 taxmann.com 411 (Kerala)

The petitioner received an order of confirmation of penalty from the State Tax Officer (STO).

 The STO directed the bank to invoke bank guarantee to recover the penalty.

The petitioner challenged the action of STO in directing bank to invoke bank guarantee and to forward demand draft of value of said bank guarantee and filed writ petition against the same.

It also submitted that it would be filing an appeal within two or three weeks and within the limitation period for filing such statutory appeal.

The Honorable High Court observed that as per Section 78 of the CGST Act, 2017, the petitioner has time of three months for depositing the amount as per the assessment.

Therefore, the petition deserved to be allowed and directed the officer to not en-cash bank guarantee and the petitioner shall continue the bank guarantee till filing of the appeal