Facts of the Case

Abhay Parakh, proprietor of Madhu Traders, challenged an ex parte demand order dated 04.04.2024 passed by the Assistant Commissioner of State Tax, Dhamtari Circle, under Section 73(1) of the CGGST Act, 2017, raising a demand of Rs.1,20,86,236/- based on alleged short payment of tax, non-consideration of credit notes and excess ITC claims across IGST, CGST and SGST, after the petitioner — owing to serious illness — could not respond to the show-cause notice in Form GST DRC-01. His subsequent appeal was rejected by order dated 27.06.2025 on the ground of delay. The petitioner contended he had, in fact, discharged the tax liability, with the alleged 'excess' ITC arising only from timing differences between GSTR-3B and GSTR-2A filings by vendors. The Chhattisgarh High Court at Bilaspur, per Justice Naresh Kumar Chandravanshi, decided the writ petition on 18 November 2025.

Issues Involved

  1. Whether a writ petition against a Section 73 demand order and a time-barred appeal-dismissal order should be entertained where a statutory second-appeal remedy to the GST Appellate Tribunal exists but the Tribunal is not yet functional.
  2. Whether the Notification dated 17.09.2025 and the Circular dated 11.07.2024 on pre-deposit procedure furnish an adequate interim mechanism for the taxpayer pending constitution of the Tribunal.
  3. Whether the statutory stay under Section 112(9) should be made available to the petitioner on compliance with that procedure.

Petitioner's Arguments

  • Despite having filed all GST returns (GSTR-1, 3B, 9 and 9C) for 2017-18 and 2018-19 and having paid all taxes — indeed, more than what was actually due — the demand order dated 04.04.2024 was passed ex parte due to the petitioner's serious illness preventing a timely reply.
  • The alleged excess ITC claim was purely a result of timing differences in vendors' GSTR-1 filings compared to the petitioner's GSTR-3B, and not any ineligible credit; Reverse Charge liability had already been discharged and was being wrongly demanded again; and part of the demand arose from non-consideration of a credit note adjustment.
  • Contended that both the original demand order and the subsequent rejection of the appeal on limitation grounds were perverse and illegal, given that the tax had, if anything, been overpaid.

Respondent's Arguments

  • The State submitted that despite notice, the petitioner did not appear before the Assistant Commissioner, resulting in the ex parte order, and that the subsequent appeal was rightly rejected as barred by limitation.
  • Pointed to the Notification dated 17.09.2025 issued under Section 112 of the CGST Act, permitting appeals to the GST Appellate Tribunal by 30.06.2026, and the Circular dated 11.07.2024, clarifying the procedure for paying the pre-deposit through the Electronic Liability Register pending constitution of the Tribunal, coupled with an undertaking to file the Tribunal appeal once it becomes operational, submitting that the writ petition was accordingly not maintainable.

Court Order / Findings

  • The Court noted that although the GST Appellate Tribunal is presently non-functional, a Vice President is expected to be appointed soon, and a specific statutory mechanism — the Notification dated 17.09.2025 together with the Circular dated 11.07.2024 — already exists to let the taxpayer pay the pre-deposit and preserve its appeal rights in the interim.
  • Where an efficacious, if presently dormant, appellate remedy before the GST Appellate Tribunal is available, supported by a specific notification and circular enabling pre-deposit payment and an interim statutory stay under Section 112(9), a High Court will decline to exercise writ jurisdiction over the merits and instead direct the taxpayer to that remedy.
  • The writ petition was disposed of granting the petitioner liberty to file the appeal per the Notification dated 17.09.2025 and Circular dated 11.07.2024, with all objections to be considered by the Tribunal once its Vice President assumes office; the statutory stay under Section 112(9) would operate on compliance.
  • The Court clarified that if the appeal is not filed within the prescribed period, or if the required pre-deposit amount is not paid, the State would be free to proceed for recovery and the order would not protect the petitioner.

Important Clarification

  • The Notification dated 17.09.2025 (extending the deadline for filing appeals before the GST Appellate Tribunal to 30.06.2026) and the Circular dated 11.07.2024 (enabling pre-deposit payment via the Electronic Liability Register, Part-II, along with an undertaking to file the Tribunal appeal once it is constituted) together form a workable bridge mechanism for taxpayers whose appellate remedy is otherwise blocked by the Tribunal's non-functionality.
  • Compliance with this pre-deposit and undertaking procedure secures the statutory stay under Section 112(9) even before the Tribunal physically begins hearing appeals, but non-compliance — a missed limitation or unpaid pre-deposit — leaves the taxpayer exposed to recovery.

Sections Involved

  • Section 73(1), CGGST Act, 2017 — determination of tax short paid, invoked via Form GST DRC-01 for alleged discrepancies in ITC and credit notes.
  • Section 112, CGST Act, 2017 — appeal to the GST Appellate Tribunal, including the pre-deposit requirement under sub-section (8) and the consequential stay under sub-section (9).
  • CGST (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019 — basis for reckoning limitation for Tribunal appeals pending its constitution.

Decision – In Favour of

Disposed of with directions; the petitioner was relegated to the statutory appellate mechanism rather than granted relief on the merits, subject to compliance with the pre-deposit procedure.

Case Details

Court: High Court of Chhattisgarh at Bilaspur. Case No.: WPT No. 175 of 2025 (2025:CGHC:56146). Coram: Hon'ble Shri Justice Naresh Kumar Chandravanshi. Date of Order: 18 November 2025.

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