When the petitioner has previously paid a sum more than the pre-deposit, the department is unable to collect the remaining balance. HC

State of Bihar v. Vihaan Networks Ltd. – (2023)

The petitioner was a GST-registered company that got a show cause notice (SCN) from the department requiring it to submit returns, documents, and other documentation in support of its claim for the carry forward of credit under TRAN-1. It responded to the notice, and thereafter a demand order was given.

It was argued that the order was issued without a hearing and after a decrease was affirmed in an appellate ruling, despite a demand for a hearing. It filed a writ case alleging that the government insisted on recovering the whole sum.

The Honorable High Court observed that the petitioner had previously deposited an amount in excess of the 20% necessary for filing an appeal with the Tribunal. Due to the fact that the Appellate Tribunal is unconstitutional, the government has acknowledged the difficulty in pursuing an appeal, and the deadline for filing appeals has been extended. Thus, petitioner’s statutory entitlement continues to exist and is not time-barred. Hence, it was determined that it would be unreasonable to collect the remaining sum from the petitioner, since more than the initial deposit had already been paid.