Facts of the Case

Tvl. Karthika Traders challenged an order dated 26.04.2024 of the Appellate Deputy Commissioner (ST), confirming an assessment order dated 30.11.2023 passed under Section 74 of the GST Act for the assessment year 2021-22, terming both orders cryptic, illegal and without jurisdiction. Since a further statutory appeal against the appellate order would ordinarily lie before the GST Appellate Tribunal, which remains uninstituted or non-functional, the petitioner had no option but to approach the Madurai Bench of the Madras High Court by way of writ petition, offering to deposit 10% of the disputed amount as a pre-deposit under Section 112.

Issues Involved

  1. Whether a taxpayer aggrieved by an appellate GST order can seek interim protection from the High Court where the Appellate Tribunal remains non-functional.
  2. What pre-deposit condition is appropriate for such interim relief, drawing from Section 112's pre-deposit framework.
  3. Whether a bank account attachment made pursuant to the confirmed order should be lifted upon compliance with the pre-deposit condition.

Petitioner's Arguments

  • Submitted that although an appeal lies against the appellate order, the Tribunal was not yet functional, leaving the writ petition as the only available remedy.
  • Expressed readiness to deposit 10% of the disputed penalty, the pre-deposit amount ordinarily required under Section 112 of the GST Act for filing a second appeal.

Respondent's Arguments

  • The Additional Government Pleader appearing for the respondents did not oppose interim relief being granted on the standard 10% pre-deposit condition, consistent with the Section 112 framework.

Court Order / Findings

  • The Court accepted the petitioner's offer to pay 10% of the disputed penalty as an interim condition, mirroring the statutory pre-deposit that would otherwise apply before the Tribunal.
  • Granted an interim stay of the appellate order subject to the petitioner depositing 10% of the penalty within four weeks, with the stay to stand automatically vacated if the deposit is not made.
  • Directed that upon remittance of the 10% amount, the attachment on the petitioner's bank account be lifted forthwith and without delay.
  • Clarified that the petitioner may file a formal appeal under Section 112 as and when the Appellate Tribunal becomes functional, and disposed of the writ petition on these terms.

Important Clarification

  • Where the GST Appellate Tribunal remains non-functional, High Courts are consistently granting interim protection to taxpayers by mirroring the Section 112 pre-deposit condition (typically 10% of the disputed penalty/tax) as a condition for staying recovery and lifting bank attachments, pending the Tribunal's eventual constitution.
  • Such interim orders do not finally decide the merits of the underlying Section 74 demand — the taxpayer's right to a full appeal on merits before the Tribunal is expressly preserved once it becomes functional.

Sections Involved

  • Section 74, CGST Act, 2017 – governs demand and recovery for tax evaded by fraud, wilful misstatement or suppression of facts.
  • Section 112, CGST Act, 2017 – prescribes the pre-deposit requirement and procedure for appeal before the GST Appellate Tribunal.

Decision – In Favour of

Disposed of in favour of the assessee on an interim basis — stay of the appellate order and release of the bank attachment granted, conditional on payment of 10% of the disputed penalty, pending the Tribunal's constitution.

Case Details

  • Court: Madurai Bench of the Madras High Court
  • Case No.: W.P(MD)No.32669 of 2025 & W.M.P.(MD)No.25751 of 2025
  • Coram: Hon'ble Mr. Justice G.R. Swaminathan
  • Date of Order: 14 November 2025

Link to Download the Order

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