Facts of the Case

Abhay Parakh, proprietor of Madhu Traders, had filed all statutory GST returns (GSTR-1, 3B, 9 and 9C) for FY 2017-18. A scrutiny notice (Form SMT-10) dated 24.05.2023 could not be replied to due to portal access issues, and a subsequent show cause notice under Section 73(1) alleged excess ITC claim and reverse-charge shortfall totalling about Rs.14.98 lakh. Because the accountant handling GST compliance abruptly left, the petitioner could not respond, leading to an ex parte order dated 04.12.2023 demanding Rs.31,36,060/-, even though he claimed to have already reversed excess ITC of Rs.5,76,392/- and paid RCM dues. The subsequent appeal was rejected on limitation grounds on 13.06.2025.

Issues Involved

  1. Whether a writ petition challenging a Section 73 demand order and its appellate rejection is maintainable when the statutory remedy of appeal to the GST Appellate Tribunal (GSTAT) exists but the Tribunal is not yet functional.
  2. Whether the petitioner is entitled to relief under the CBIC circular dated 11th July 2024 and the notification dated 17th September 2025 enabling pre-deposit payment and stay of recovery pending constitution of the GSTAT.

Petitioner's Arguments

  • The petitioner had filed all statutory returns and paid all applicable taxes; despite this, an excessive demand of Rs.31,36,060/- was raised, and the subsequent appeal was wrongly rejected purely on limitation, making both orders perverse and illegal.
  • The demand was factually incorrect since excess ITC had already been reversed and RCM dues paid before the ex parte order was passed.

Respondent's Arguments

  • The State's counsel submitted that despite notices being served, the petitioner did not appear before the assessing authority, justifying the ex parte order, and that the subsequent appeal was correctly rejected as time-barred.
  • The State pointed out that a further appeal lies to the GST Appellate Tribunal under Section 112 of the CGST Act, and that the notification dated 17th September 2025 permits the petitioner to file such an appeal by 30.06.2026, with the CBIC circular dated 11th July 2024 clarifying the procedure for paying the Section 112(8) pre-deposit and availing the Section 112(9) stay even before the Tribunal becomes operational.

Court Order / Findings

  • The Court considered the notification dated 17th September 2025 and the CBIC circular dated 11th July 2024, and found that a statutory remedy of appeal before the GST Appellate Tribunal is available to the petitioner, even though the Tribunal is not presently functional.
  • Since an efficacious statutory remedy exists, the Court declined to entertain the writ petition on merits and disposed of it granting liberty to the petitioner to file an appeal per the notification and circular within the stipulated period.
  • The Court directed that once the petitioner complies with the pre-deposit and undertaking requirements under Section 112(8)/(9), the statutory stay against recovery of the remaining confirmed demand would operate until the Tribunal decides the appeal, while cautioning that failure to file the appeal or deposit the pre-deposit would leave the State free to proceed with recovery.

Important Clarification

  • Even though the GST Appellate Tribunal (GSTAT) is yet to become functional in many states, taxpayers are not left remediless: CBIC's circular dated 11th July 2024 and the notification dated 17th September 2025 allow them to pay the Section 112(8) pre-deposit in advance and secure a stay of recovery under Section 112(9) pending constitution of the Tribunal.
  • High Courts are increasingly declining to exercise writ jurisdiction over GST demand disputes once this GSTAT-linked interim mechanism is pointed out, treating it as an adequate alternate remedy.

Sections Involved

  • Section 73(1), CGST/Chhattisgarh GST Act, 2017 — demand provision under which the original order was passed.
  • Section 112, CGST Act, 2017 — appeal to the GST Appellate Tribunal, including the pre-deposit under sub-section (8) and stay under sub-section (9).
  • CBIC Circular dated 11th July 2024 — clarifies the procedure for making the Section 112(8) pre-deposit payment before the Tribunal becomes operational.
  • Notification dated 17th September 2025, Ministry of Finance — extends the timeline for filing appeals before the GSTAT to 30.06.2026.

Decision – In Favour of

The matter was disposed of with directions, in part in favour of the Department (writ declined on the merits), while preserving the assessee's (Abhay Parakh's) right to pursue the GSTAT appeal with interim stay protection.

Case Details

High Court of Chhattisgarh at Bilaspur; WPT No. 176 of 2025; Coram: Hon'ble Shri Justice Naresh Kumar Chandravanshi; Order dated 18/11/2025.

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