Facts of the Case

M/s World Trade Park Ltd, a company with its registered office in Mumbai and corporate office in Jaipur, filed a writ petition before the Rajasthan High Court, Jaipur Bench, against the Union of India, the GST Council, and state and central tax authorities. The petitioner's grievance arose from an order of the First Appellate Authority under the GST Act, against which a further statutory appeal ordinarily lies to the Goods and Services Tax Appellate Tribunal (GSTAT) under Section 112. Since the GSTAT had not been constituted or made functional at the relevant time, the petitioner could not file its second appeal within the prescribed period, leaving it exposed to coercive recovery of the disputed demand despite having a statutory remedy still pending constitution.

Issues Involved

  1. Whether an assessee can be denied protection from recovery merely because the GST Appellate Tribunal has not been constituted, preventing the filing of a statutory second appeal under Section 112.
  2. Whether the earlier coordinate-bench formula requiring deposit under Section 112(8) with liberty to appeal once the Tribunal is constituted should be extended to the petitioner's case.

Petitioner's Arguments

  • The appeal against the order of the First Appellate Authority could not be filed because the GST Appellate Tribunal was not functional, and the petitioner should not be rendered remediless for this administrative lapse.
  • The issue was already squarely covered by the Division Bench's own earlier ruling in Jagdamba Motors vs Union of India & Ors, decided on 27.11.2024, and the petitioner's claim for relief, including protection from recovery, should follow that precedent.

Respondent's Arguments

  • Learned counsel for the State did not object to extending the relief already granted in similar matters, including the order dated 15.02.2024 in D.B. Civil Writ Petition No. 1113/2024.
  • The respondents relied on a Government of Rajasthan circular dated 23.03.2020 that had earlier informed the protective formula adopted by the Court in comparable cases.

Court Order / Findings

  • The Bench found the issue squarely covered by its earlier decisions in Jagdamba Motors and in D.B. Civil Writ Petition No. 1113/2024, both dealing with the non-constitution of the GSTAT.
  • The Court held that the petitioner would not be kept in recovery jeopardy provided it deposits the amount payable under Section 112(8) of the Rajasthan GST Act within three months, after which no further recovery proceedings for the balance shall be drawn, subject to the petitioner availing the statutory appeal within three months of the Tribunal's constitution.
  • The writ petition was disposed of in these terms without delving into the merits of the underlying tax dispute.

Important Clarification

  • Non-constitution of the GST Appellate Tribunal cannot be used by the department to enforce recovery of a disputed demand that the assessee has a statutory right to appeal.
  • Payment of the pre-deposit contemplated under Section 112(8) operates as sufficient protection against recovery, with the limitation period for the second appeal effectively running from the date the Tribunal becomes functional.
  • Courts have consistently adopted this protective formula across similarly placed petitioners rather than deciding each dispute's merits individually.

Sections Involved

  • Section 112, CGST Act, 2017 – governs appeals to the GST Appellate Tribunal, including sub-section (8) on the mandatory pre-deposit for filing such an appeal.
  • Section 107, CGST Act, 2017 – governs the First Appellate Authority stage from whose order the present dispute arose.

Decision – In Favour of

The order is a procedural accommodation rather than a merits ruling; on its protective terms it is broadly in favour of the assessee, since it forecloses recovery of the balance demand once the statutory pre-deposit is made, while keeping the substantive dispute open for adjudication before the Tribunal once constituted.

Case Details

Court: High Court of Judicature for Rajasthan, Bench at Jaipur. Case No.: D.B. Civil Writ Petition No. 2385/2024. Neutral Citation: 2025:RJ-JP:48611-DB. Coram: Hon'ble Mr. Justice Mahendar Kumar Goyal and Hon'ble Mr. Justice Bhuwan Goyal. Date of Order: 1st December, 2025.

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