Chhattisgarh High Court Allows GST Recovery Stay Through Pre-Deposit and Undertaking Until Tribunal Constitution

The Hon'ble High Court of Chhattisgarh at Bilaspur in M/s Archita Soap And Chemical LLP vs Joint Commissioner (Appeals) State Tax & Another W.P(T) No.109 of 2025 dated August 14, 2025 held that taxpayers can seek stay of recovery proceedings pending constitution of the GST Appellate Tribunal by filing undertaking and making pre-deposit as per Circular No.224/18/2024-GST. The Court granted liberty to the Petitioner to comply with the circular conditions and avail stay of recovery of remaining demand amount.

Facts of the Case

The Petitioner M/s Archita Soap And Chemical LLP, a partnership firm engaged in business activities, filed the present writ petition challenging two orders. The first impugned order was dated September 9, 2024 passed by Respondent No.1 Joint Commissioner (Appeals) State Tax under Section 107(11) of the Chhattisgarh Goods & Services Tax Act, 2017. The second impugned order was dated March 10, 2025 whereby the application filed by the Petitioner under Section 161 of the said Act was rejected by the same authority.

The Petitioner contended that the Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing had issued Circular No.224/18/2024-GST dated July 11, 2024 under the subject heading "Guidelines for recovery of outstanding dues, in cases wherein first appeal has been disposed of, till Appellate Tribunal comes into operation." This circular laid down policy guidelines for cases where appeals against appellate authority orders could not be filed under Section 112 of the Central Goods and Services Tax Act, 2017 due to non-constitution of the Appellate Tribunal.

The Petitioner submitted that as prescribed at paragraph 4 of the said circular, taxpayers were permitted to make payment of an amount equal to the pre-deposit requirement by navigating to Services, then Ledgers, then Payment towards demand from their dashboard. The taxpayer would be navigated to Electronic Liability Register Part-II where they could select the outstanding demand order against which payment was intended. The amount paid would be mapped against the selected order and demand amount would be reduced in the balance liability register. This amount would be adjusted against the pre-deposit requirement when filing appeal before the Appellate Tribunal.

Prior to the amendment of the CGST Act by Act 8 of 2023 effective from August 1, 2023, a circular dated December 3, 2019 had extended limitation periods. As per the July 11, 2024 circular, taxpayers were now mandatorily required to file an undertaking with the jurisdictional proper officer that they would file appeal against the appellate authority order before the Tribunal when it becomes operational within timelines mentioned in Section 112 read with Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019. The Petitioner was aggrieved by the rejection of their application under Section 161 and sought relief in accordance with the circular provisions.

Issue

Whether taxpayers can seek stay of recovery proceedings against appellate authority orders by filing undertaking and making pre-deposit as per guidelines issued in Circular No.224/18/2024-GST pending constitution of the GST Appellate Tribunal.

Held by the Court

The Hon'ble High Court of Chhattisgarh at Bilaspur in W.P(T) No.109 of 2025 held that:

The Court observed that having regard to the submissions made by learned counsel for the parties and particularly considering that there are explicit guidelines for recovery of outstanding dues in cases wherein first appeal has been disposed of till the Appellate Tribunal comes into operation, nothing remains for adjudication in the writ petition. The Court recognized the validity and applicability of the circular issued by the Central Board of Indirect Taxes and Customs.

The Court held that liberty is reserved in favour of the Petitioner to comply with the necessary conditions of Circular No.224/18/2024-GST dated July 11, 2024. The Petitioner was directed to file an undertaking with the jurisdictional proper officer that she would file an appeal against the order under challenge before the Appellate Tribunal as and when it comes into operation within the time lines mentioned in Section 112 of the CGST Act.

The Court further held that the Petitioner shall also pay pre-deposit as per sub-section (8) of Section 112 of CGST Act within a period of 15 days from the date of receipt of copy of the order. The Court ordered that as per the said circular, if the Petitioner files such undertaking with regard to the pre-statutory deposit, the recovery of the remaining amount shall remain stayed as per sub-section (9) of Section 112 of the CGST Act.

The Court opined that the circular provides a practical mechanism for taxpayers to seek relief from recovery proceedings while awaiting constitution of the Appellate Tribunal. The Court made it clear that if the said amount is not deposited within the aforementioned period, the order shall lose its efficacy, thereby ensuring compliance with the circular requirements.

The Court observed that learned State Counsel did not oppose the aforesaid prayer, indicating acceptance of the relief mechanism provided under the circular. The judgment established that taxpayers facing similar situations can avail the benefit of stay from recovery proceedings by following the prescribed procedure of filing undertaking and making pre-deposit as outlined in the government circular.

Relevant Sections

Section 107(11) of the Chhattisgarh Goods & Services Tax Act, 2017 - "Provision relating to appellate authority orders"

Section 112 of the Central Goods and Services Tax Act, 2017 - "Appeal to Appellate Tribunal"

Sub-section (8) of Section 112 of the CGST Act - "No appeal shall be filed under sub-section (1) unless the appellant has paid in cash a sum equal to ten per cent of the amount of tax, interest, fine, fee and penalty arising from the impugned decision or order, as the case may be, in relation to which the appeal has been filed"

Sub-section (9) of Section 112 of the CGST Act - "Where an appeal has been filed before the Appellate Tribunal under sub-section (1), recovery of the remaining amount of tax, interest, fine, fee and penalty arising from the impugned decision or order shall be deemed to be stayed till the disposal of the appeal"

Section 161 of the Chhattisgarh Goods & Services Tax Act, 2017 - "Provision for recovery proceedings"

Pari Materia / Cases Referred

1. Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019Date: December 3, 2019Facts: Extension of limitation periods for filing appeals before GST Appellate TribunalHeld: Limitation periods extended to facilitate taxpayers pending constitution of Appellate Tribunal

2. Circular No.224/18/2024-GSTDate: July 11, 2024Authority: Central Board of Indirect Taxes and Customs, GST Policy WingSubject: Guidelines for recovery of outstanding dues in cases wherein first appeal has been disposed of till Appellate Tribunal comes into operationGuidelines: Taxpayers can make pre-deposit and file undertaking to avail stay of recovery proceedings pending constitution of Appellate Tribunal

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