The petitioner suffered an order under Section 129 of the Central Goods and Services Tax/ State Goods and Services Tax Act (CGST/SGST Act). While the proceedings were pending before the authorities, the petitioner produced a bank guarantee and got the goods and conveyance released. The petitioner challenged the proceedings under Section 129 before the 1st Appellate Authority, who also confirmed the proceedings of the original authority.

2. The petitioner apprehends that pending the constitution of the State Appellate Tribunal, the bank guarantee provided by the petitioner may be invoked. He relies on the judgment of this Court in M/s.Podaran Foods India Pvt. Ltd. Vs. State of Kerala; [2021 (1) TMI 552 Kerala High Court] to content that it will not be proper for the authorities to invoke the bank guarantee provided by the petitioner till the appeal period is over. It is the case of the petitioner that since the Appellate Tribunal has not been constituted, the appeal period has not even started to run and therefore the petitioner is entitled to a direction that pending the constitution of the Appellate Tribunal and without giving to the petitioner a right to file such appeal, the bank guarantee provided by the petitioner cannot be invoked. It is submitted that the proposition that the time for appeal commences only from the day on which the Appellate Tribunal is constituted flows from Circular No.132/2/2020-GST issued by the Central Board of Excise and Customs.

3. The learned Senior Government Pleader submits that in order to maintain an appeal before the Appellate Tribunal under Section 112 of the CGST/SGST Act, the petitioner has to remit a sum equivalent to 20% of the amount of tax in dispute and while a direction can be issued to the State not to invoke the bank guarantee, the petitioner must atleast be required to deposit the amount, that he would had deposit if the Appellate Tribunal had been constituted.

4. Having heard the learned counsel for the petitioner and the learned Senior Government Pleader for the State, I am of the opinion that as long as the provisions of Section 112 (8)(b) of the CGST/SGST Act requires the petitioner to deposit a sum equivalent to 20% of the tax amount in dispute as a condition for maintaining an appeal before the Tribunal, it must be held that even if the Appellate Tribunal is not constituted the petitioner must be directed to deposit a sum equivalent to 20% of the tax amount in dispute as a condition for stay of invocation of bank guarantee.

This payment will however be subject to the condition that the same will be treated as sufficient compliance of the provisions contained in Section 112 (8)(b) of the CGST/SGST Act to maintain an appeal as and when the Appellate Tribunal is constituted.

5. In the result, this Writ Petition is disposed of directing that on petitioner remitting an amount payable by the petitioner under Section 112(8)(b) of the CGST/SGST Act for maintaining an appeal before the Appellate Tribunal, any bank guarantee furnished by the petitioner in proceedings under Section 129 of the CGST/SGST Act will not be invoked. The petitioner shall keep the bank guarantee alive and if the petitioner does not renew the bank guarantee within time, it will be open to the officer to invoke the bank guarantee not withstanding the directions contained in this judgment. The amount paid by the petitioner shall be treated as sufficient compliance of provisions of Section 112 (8)(b) of the CGST/SGST Act as and when the Tribunal is constituted and the petitioner will not be required to deposit any further amount in terms of that provision for maintaining an appeal. The payment shall be made within a period of two weeks from the date of receipt of a certified copy of this judgment.