Legal Headline: Taxpayers can stay recovery by undertaking to file appeal before operational GST Appellate Tribunal.

The Petitioner, M/s Maa Shakambari Steel Limited, filed a writ petition against an order dated January 20, 2023, passed by Respondent No.1 under Section 107(11) of the Chhattisgarh Goods & Services Tax Act, 2017, and a subsequent order dated March 10, 2025, rejecting their application under Section 161 of the same Act.

The Petitioner sought relief, referencing a circular issued by the Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing (Circular No. 224/18/2024-GST dated July 11, 2024), which provides guidelines for the recovery of outstanding dues when the first appeal has been disposed of but the Appellate Tribunal is not yet operational.

This circular outlines a procedure for taxpayers to make a pre-deposit and file an undertaking to stay recovery proceedings until the Tribunal is constituted.

Additionally, the Government of India, Ministry of Finance, Department of Revenue, vide Notification No. S.O. 4220(E) dated September 17, 2025, notified June 30, 2026, as the extended date for filing appeals before the GST Appellate Tribunal for orders communicated before April 1, 2026.

The State Counsel did not oppose the Petitioner's prayer to avail this alternative recovery mechanism.

1. Whether the Petitioner should be granted liberty to avail the alternative recovery mechanism provided by Circular No. 224/18/2024-GST dated July 11, 2024, and Notification No. S.O. 4220(E) dated September 17, 2025, by filing an undertaking and making a pre-deposit, given the non-constitution of the Appellate Tribunal.

The court primarily applied Section 112(8) and 112(9) of the Central Goods and Services Tax Act, 2017 (CGST Act), concerning the requirement for pre-deposit and the stay of recovery of the remaining demand upon such deposit, respectively.

It also relied on Circular No. 224/18/2024-GST dated July 11, 2024, issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing, which provides guidelines for recovery of outstanding dues when the Appellate Tribunal is not yet in operation, clarifying the procedure for pre-deposit and filing an undertaking.

Furthermore, the court considered Notification No. S.O. 4220(E) dated September 17, 2025, which extended the timelines for filing appeals before the Goods and Services Tax Appellate Tribunal.

The court recognized that explicit guidelines exist for the recovery of outstanding dues in cases where the first appeal has been disposed of but the Appellate Tribunal is not yet operational.

The Petitioner's reliance on Circular No. 224/18/2024-GST was found to be pertinent as it addresses the exact situation where appeals under Section 112 of the CGST Act could not be filed due to the non-constitution of the Tribunal.

The circular outlines a mechanism allowing taxpayers to make a pre-deposit under Section 112(8) and file an undertaking to stay the recovery of the remaining confirmed demand under Section 112(9), provided they commit to filing an appeal once the Tribunal is operational.

The court noted that the State Counsel did not object to this approach.

Considering these operative guidelines and the specific notification extending the appeal filing date, the court concluded that no further adjudication was required, and the Petitioner should be allowed to follow the prescribed alternative recovery procedure.

It held that if the Petitioner files such an undertaking and makes the pre-deposit, the recovery of the remaining amount shall remain stayed as per Section 112(9) of the CGST Act.

The court clarified that failure to deposit the amount within the specified period would render the order ineffective.

The writ petition stood disposed of with these directions.