Case image

Facts of the Case

Maa Kali Industries, a proprietorship firm based in Raipur, challenged an order dated 04.11.2022 passed by the Deputy Commissioner State Tax and an appellate order dated 28.03.2024 passed under Section 107(11) of the Chhattisgarh Goods & Services Tax Act, 2017, along with an attachment notice dated 16.01.2026. Since the second appeal against the appellate order lay to the Goods and Services Tax Appellate Tribunal (GSTAT) under Section 112, and the Tribunal had not been functional at the relevant time, the petitioner could not pursue that remedy and approached the High Court instead, seeking protection against recovery pending the Tribunal's constitution.

Issues Involved

  1. Whether relief can be granted to a taxpayer unable to file a second appeal under Section 112 of the CGST Act solely because the GST Appellate Tribunal had not been constituted.
  2. Whether the taxpayer must, as a condition for such protection, comply with the pre-deposit and undertaking requirements prescribed in the CBIC's recovery guidelines and the GSTAT notification.

Petitioner's Arguments

  • The petitioner relied on CBIC Circular No. 224/18/2024-GST dated 11.07.2024, providing that recovery of outstanding dues can be stayed if the taxpayer pays the Section 112(8) pre-deposit and files an undertaking to appeal before the GSTAT once functional.
  • Reliance was placed on Notification No. S.O. 4220(E) dated 17.09.2025, fixing 30 June 2026 as the outer date for filing GSTAT appeals against orders communicated before 1 April 2026.
  • It was submitted that the petition may be disposed of granting liberty to avail this alternative recovery-protection mechanism rather than being kept pending indefinitely.

Respondent's Arguments

  • The learned State counsel did not oppose the petitioner's prayer for liberty to comply with the circular's undertaking and pre-deposit requirements.
  • No independent contention was pressed against the reliefs sought, given the availability of the CBIC circular mechanism.

Court Order / Findings

  • The Court observed that with explicit guidelines already in place for recovery of dues pending constitution of the Appellate Tribunal, nothing further remained for adjudication in the writ petition.
  • Liberty was reserved to the petitioner to file the requisite undertaking and pay the Section 112(8) pre-deposit within 15 days, upon which recovery of the balance demand would remain stayed under Section 112(9) of the CGST Act.
  • The Court clarified that if the pre-deposit was not made within the stipulated period, the order granting protection would lose its efficacy.

Important Clarification

  • Pending constitution of the GST Appellate Tribunal, a taxpayer aggrieved by a first appellate order is not without remedy: recovery can be stayed by filing an undertaking to appeal before the GSTAT once operational and paying the statutory pre-deposit under Section 112(8), per CBIC Circular No. 224/18/2024-GST.
  • Such protective orders are conditional and self-executing — non-compliance with the pre-deposit timeline automatically causes the stay to lapse, without need for a further court order.

Sections Involved

  • Section 107(11), Chhattisgarh GST Act, 2017 – governs the powers of the first appellate authority.
  • Section 112(8) and (9), CGST Act, 2017 – prescribe the pre-deposit for filing a second appeal before the GSTAT and the consequential stay on recovery.
  • CBIC Circular No. 224/18/2024-GST dated 11.07.2024 – lays down the recovery mechanism pending constitution of the GSTAT.

Decision – In Favour of

The decision is disposed of with directions, substantially in favour of the petitioner: recovery of the demand stands stayed on compliance with the pre-deposit and undertaking conditions, without the Court expressing any opinion on the merits of the underlying tax demand.

Case Details

Court: High Court of Chhattisgarh at Bilaspur
Case No.: WPT No. 56/2026
CNR / Citation: 2026:CGHC:17549
Coram: Hon'ble Shri Justice Rakesh Mohan Pandey
Date of Order: 17 April 2026

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.