The Calcutta High Court stays GST demands till tribunal is set up Calcutta High court’s divisional bench recently stayed recovery proceedings and modified the order of a single judge bench which had a condition to grant a stay on the demand: payment of 20% of the disputed tax

The GST Tribunal is a forum that would provide taxpayers with a way to appeal GST-related decisions. However, the tribunal is still being set up, and in the meantime, taxpayers are having to file writ appeals with the high courts to seek relief.

The Calcutta high court's divisional bench recently stayed recovery proceedings and modified the order of a single judge bench which had a condition to grant a stay on the demand: payment of 20% of the disputed tax.

This is a positive development for taxpayers, as it means that they will no longer have to pay 20% of the disputed tax in order to get a stay on recovery proceedings.

Ankit Kanodia, advocate who represented the taxpayer — Jai Venktesh Concast — before the Calcutta HC, said that the judgment will help all taxpayers who are facing notices from tax authorities for recovery of the confirmed demand, after the order of the first appellate authority.

He said that he has seen recovery notices being sent after expiry of three months of the appellate order and the payment is also being debited from the electronic credit ledger, subject to availability of balance.

This is done on the ground that there is no stay of demand from any higher forum. The harsh action of the department will be stayed by the present judgment, giving relief till the formation of the GST Tribunal.

The judgment of the Calcutta high court is a welcome development for taxpayers. It provides much-needed relief to taxpayers who are facing recovery proceedings from the tax authorities.

The judgment also sends a strong message to the tax authorities that they cannot simply debit money from taxpayers' electronic credit ledgers without a valid order from a court.

The formation of the GST Tribunal is still pending, but the judgment of the Calcutta high court will provide much-needed relief to taxpayers until the tribunal is set up.