Archita Soap And Chemical LLP Vs Joint Commissioner (Appeals), State Tax
Date: August 13, 2025
Subject Matter
No GST Recovery if pre-deposit made and an undertaking submitted committing to file an appeal with the Tribunal once it is constituted
Summary
This writ petition challenges an order dated September 9, 2024, passed under Section 107(11) of the Chhattisgarh Goods & Services Tax Act, 2017, and a subsequent rejection of a rectification application under Section 161 of the Act on March 10, 2025. The core issue is the recovery of outstanding dues after the first appeal has been decided, but a second appeal to the Appellate Tribunal (GSTAT) is not possible because the Tribunal is not yet operational.
The petitioner's counsel referred to Circular No. 224/18/2024-GST dated July 11, 2024, issued by the Central Board of Indirect Taxes and Customs (CBIC). This circular provides specific guidelines for such situations. It allows taxpayers to make a pre-deposit and file an undertaking with the proper officer, committing to file an appeal with the Tribunal once it is constituted. Upon fulfilling these conditions, the recovery of the remaining confirmed demand is automatically stayed under Section 112(9) of the CGST Act.
The learned State Counsel did not oppose this prayer. The court, finding that there were explicit guidelines to handle this situation, agreed that nothing remained for adjudication in the petition itself.
The court disposed of the writ petition, granting the petitioner the liberty to follow the procedure outlined in Circular No. 224/18/2024-GST. The petitioner must file an undertaking/declaration with the jurisdictional proper officer and pay the pre-deposit amount as required by Section 112(8) of the CGST Act, all within 15 days of receiving a copy of the order. Upon compliance, the recovery of the remaining amount of the confirmed demand will be stayed. If the petitioner fails to comply, the court's order will lose its efficacy, and the recovery proceedings can be initiated.
FULL TEXT OF THE JUDGMENT/ORDER OF CHHATTISGARH HIGH COURT
1. Heard.
2. Issue notice to the Respondents as per rules.
3. Learned Counsel appearing for the Respondents accepts notice.
4. With the consent of learned Counsel for the parties, the matter is heard finally.
5. This Petition has been filed against the order dated 09.09.2024 passed by Respondent No.1 under Section 107(11) of the Chhattisgarh Goods & Services Tax Act, 2017 and order dated 10.03.2025 whereby, the application filed by the Petitioner under Section 161 of the said Act has been rejected by the said authority.
6. At the outset, learned Counsel for the Petitioner submits that Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing has already issued a circular i.e. Circular No.224/18/2024-GST dated 11.07.2024 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” and laid down the policy where the Appeal against such order of the appellate authority could not be filed under Section 112 of the Central Goods and Services Tax Act, 2017 (for short ‘the CGST Act’) due to non-constitution of Appellate Tribunal (for short ‘the Tribunal’). He further submits that as prescribed at para-4 of the said circular, “in order to facilitate the taxpayers to make the payment of the amount of pre-deposit as per sub-section (8) of Section 112 of the CGST Act and to avail the benefit of stay from recovery of the remaining amount of confirmed demand as per sub-section (9) of section 112 of the CGST Act, it is clarified that in cases where the taxpayer decides to file an Appeal against the order of appellate authority and wants make the payment of the amount of pre-deposit as per sub-section (8) of Section 112 of the CGST Act, he can make the payment of an amount equal to the amount of pre-deposit by navigating to Services >> Ledgers >> Payment towards demand from his dashboard. The taxpayer would be navigated to Electronic Liability Register (ELL) Part-II in which he can select the order, out of the outstanding demand orders, against which payment is intended to be made. The amount so paid would be mapped against the selected order and demand amount would be reduced in the balance liability in the aforesaid register. The said amount deposited by the taxpayer will be adjusted against the amount of pre-deposit required to be deposited at the time of filing appeal before the Appellate Tribunal.”
He further submits that earlier also, prior to the amendment of the CGST Act, by Act 8 of 2023, which came into force with effect from 01.08.2023, a circular has been issued on 03.12.2019 whereby, limitation has already been extended. As per circular dated 11.07.2024, it is now mandatory that the tax payer also needs to file an undertaking/declaration with the jurisdictional proper officer that he will file Appeal against the said order of the appellate authority before the Tribunal, as and when it comes into operation and referred to relevant paras i.e. paras-5 & 6, which read as under:-
“5. The taxpayer also needs to file an undertaking/declaration with the jurisdictional proper officer that he will file appeal against the order of the appellate authority before the Appellate Tribunal, as and when it comes into operation, within the timelines mentioned in section 112 of the CGST Act read with Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019. On providing the said undertaking and on payment of an amount equal to the amount of pre-deposit as per the procedure mentioned in para 4 above, the recovery of the remaining amount of confirmed demand as per the order of the appellate authority will stand stayed as per provisions of sub-section (9) of section 112 of CGST Act.
6. In case, the taxpayer does not make the payment of the amount equal to amount of pre-deposit or does not provide the undertaking/ declaration to the proper officer, then it will be presumed that taxpayer is not willing to file appeal against the order of the appellate authority and in such cases, recovery proceedings can be initiated as per the provisions of law. Similarly, when the Tribunal comes into operation, if the taxpayer does not file appeal within the timelines specified in Section 112 of the CGST Act read with Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019, the remaining amount of the demand will be recovered as per the provisions of law.”
He lastly submits that this Petition may be disposed of granting liberty in favour of the Petitioner to avail the alternative deposit by filing an undertaking/declaration in terms of circular dated 11.07.2024 issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing.
7. Learned State Counsel does not oppose the aforesaid prayer.
8. 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, this Courts is of the considered opinion that nothing remains for adjudication in this Writ Petition.
9. Accordingly, liberty is reserved in favour of the Petitioner to comply with the necessary conditions of circular No.224/18/2024-GST of the Central Board of Indirect Taxes and Customs dated 11.07.2024 by filing an undertaking/declaration 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 and 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 this order. It is 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.
10. It is made clear that if the said amount is not deposited within the aforementioned period, this order shall lose its efficacy.
11. With the aforesaid direction/observation, the instant Writ Petition stands disposed of.