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Vidya Trading Co. & Anr. Vs Senior Joint Commissioner of State Tax Kolkata North Circle (Calcutta High Court)

Date: November 23, 2025

Court: High Court
Bench: Calcutta
Type: Writ Petition
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Subject Matter

GST Authorities Cannot Recover Tax Exceeding Statutory Pre-deposit During Appeal Process

Summary

The High Court allowed the writ petition in part, directing the GST authorities to refund any amount recovered in excess of the statutory pre-deposit requirements for appeals under Sections 107(6) and 112(8) of the CGST/WBGST Act. This decision was based on the premise that such recovery proceedings are deemed stayed once the requisite pre-deposits are made, particularly when the Appellate Tribunal is not yet functional, thereby denying the petitioner a forum for further appeal.

Summary of Facts and Dispute:
  1. Impugned Action: The Appellate Authority, through an order dated March 12, 2025, dismissed the petitioner's appeal against an order dated December 27, 2023, issued under Section 73 of the WBGST Act, 2017 / CGST Act, 2017. Subsequently, the respondent GST authorities recovered the entire tax amount determined by the original order, despite the time to prefer an appeal before the Appellate Tribunal still being available until June 30, 2026, as per a notification dated September 17, 2025.
  2. Petitioner's Argument: The petitioners argued that the adjudicating proceeding itself was time-barred, as notifications (No. 9/2023-Central Tax dated March 31, 2023, and No. 599-F.T. dated April 12, 2023) extending limitation under Section 168A were ultra vires, having been issued without a force majeure situation. They further contended that the recovery of the entire tax amount, exceeding the statutory pre-deposit for appeals under Sections 107(6) and 112(8), was illegal, especially since the Appellate Tribunal was not yet functional, leaving them without an avenue to assail the order.
  3. Core Question of Law: Can GST authorities recover the entire tax amount determined by an adjudicating order, exceeding the combined statutory pre-deposit amounts for appeals under Sections 107(6) and 112(8) of the CGST/WBGST Act, when the Appellate Tribunal is not yet constituted and available for further appeals?
Key Legal Issues & Findings:
Legality of Tax Recovery Exceeding Statutory Pre-deposits

The Court referred to AEW Technologies LLP Vs. Assistant Commisisoner of Revenue, Bureau of Investigation [2023] 154 com 265 (Calcutta) and Supreme Infotrade Private Limited & Anr. Vs. The Assistant Commissioner of State Tax, Refund Vertical, WBGST & Ors. in WPA 11681 of 2025 dated 06.08.2025 in its analysis of recovery proceedings.

  • Pre-deposit for First Appeal: An appellant before the first appellate authority under Section 107 of the Act is required to pre-deposit an amount equivalent to 10% of the tax in dispute, as per Section 107(6).
  • Pre-deposit for Tribunal Appeal: An appellant before the Appellate Tribunal under Section 112 is required to make an additional pre-deposit of 10% of the remaining amount of tax in dispute, in addition to the amount paid under Section 107(6), as per Section 112(8).
  • Deemed Stay on Recovery: Upon making these cumulative pre-deposits as per Sections 107(6) and 112(8), recovery proceedings for the balance amount are deemed to have been stayed.
  • Illegal Excess Recovery: The respondent GST authority therefore could not have proceeded to recover any sum in excess of the cumulative amounts required to be deposited by an appellant before the said two authorities.
Ruling:
  1. Outcome: The recovery of any sum by the GST authorities in excess of the cumulative pre-deposit amounts mandated by Section 107(6) and Section 112(8) of the WBGST Act, 2017 / CGST Act, 2017 is deemed illegal.
  2. Directions: The authorities shall refund to the petitioners any sum recovered in excess of the statutory pre-deposit amounts by re-crediting the same to the petitioner no.1’s electronic credit ledger within a period of two weeks from the date of communication of this order.
  3. Liberty: The Central GST authorities are added as parties to the writ petition. The Revenue is granted liberty to file an affidavit-of-opposition within four weeks, and the petitioners may file an affidavit-in-reply within one week thereafter. The writ petition will be listed for hearing on the other grounds, including the challenge to the legality of notifications issued under Section 168A.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

1. As prayed for, the Central GST Authorities may be added as parties to the writ petition. A copy of the writ petition may be served upon the added respondents within a week from date.

2. Anurag Roy who usually appears on behalf of the CGST authorities submits that he has instruction to appear in this matter. In such view of the matter service may be effected upon Mr. Roy.

3. Since notifications issued by the Central Board of Indirect Taxes and Customs and by the State Government have also been challenged in the writ petition, a notice of this writ petition may also be served upon the learned Attorney General and the learned Advocate General.

4. The petitioners are aggrieved by an order dated March 12, 2025 passed by the Appellate Authority under Section 107 of the WBGST Act, 2017 / CGST Act, 2017 (hereafter the said Act of 2017) whereby the petitioners’ appeal against the order dated December 27, 2023 passed under Section 73 of the said Act of 2017 has been dismissed.

5. Mr. Dugar, learned advocate appearing for the petitioners submits that the adjudicating proceeding itself is barred by limitation inasmuch as notification no. 9/2023-Central Tax dated March 31, 2023 issued by the Central Board of Indirect Taxes and Customs and notification no.599-F.T. dated April 12, 2023 issued by the Department of Finance, State of West Bengal, on the strength whereof the said proceeding has been initiated, have been issued in violation of the provisions of Section 168A of the said Act of 2017. It is submitted that the provisions of Section 168A of the said Act of 2017 can be invoked only in case of a force majeure situation and the said notifications have been issued without there being any force majeure situation. It is submitted that since the condition precedent for invoking the provisions of Section 168A of the said Act of 2017 is absent, the said two notifications are ultra vires the provisions of Section 168A of the said Act of 2017 and should be quashed.

6. It is further submitted that the appellate order impugned in the writ petition is erroneous on various other grounds as well. Mr. Dugar further submits that although the order impugned herein is appealable under Section 112 of the said Act of 2017 yet since the Tribunal before which such appeal could be carried has not yet become confessional, therefore the petitioners have no avenue to assail the said order.

7. In view of the aforesaid facts, this writ petition is entertained.

8. Learned advocate appearing for the petitioners further submits that the respondent GST authorities have gone ahead and recovered the entire tax determined by the said authorities by order dated December 27, 2023 that was affirmed by the order impugned herein despite the fact that time to prefer appeal before the Appellate Tribunal is still there in terms of a notification dated September 17, 2025 issued by the Government of India. It is submitted that in terms of the said notification, the petitioners would be entitled to file an appeal against the Appellate Authority’s order passed under Section 107 of the said Act of 2017 till June 30, 2026 and that in such view of the matter the excess amount recovered should be refunded to the petitioners. In support of his submissions, he relies upon the following judgments.

i. AEW Technologies LLP Vs. Assistant Commisisoner of Revenue, Bureau of Investigation reported in [2023] 154 com 265 (Calcutta)

ii. Supreme Infotrade Private Limited & Anr. Vs. The Assistant Commissioner of State Tax, Refund Vertical, WBGST & Ors. in WPA 11681 of 2025 dated 06.08.2025

9. Having heard the learned counsel appearing for the respective parties and having considered the material on record, this Court is of the view that since an appellant before the first appellate authority under Section 107 of the said Act of 2017 is only required to put in a pre-deposit equivalent to 10 per cent of the tax in dispute in terms of Section 107(6) of the said Act of 2017 and an appellant before the Tribunal is required to put in 10 per cent of the remaining amount of tax in dispute (in addition to the amount paid) under Section 107(6) of the said Act of 2017 in terms of the provisions of Section 112(8) of the said Act of 2017 and since upon aforesaid pre-deposits being made in terms of Sections 107(6) and 112(8) of the said Act of 2017, recovery proceedings for the balance amount is deemed to have been stayed, therefore the respondent GST authority could not have proceeded to recover the sum in excess of the cumulative sums (amounts) required to be deposited by an appellant before the said two authorities in terms of Section 107(6) and Section 112(8) of the said Act of 2017.

10. In such view of the matter the authorities shall refund to the petitioners any sum that they may have recovered in excess of the sum that was required to be deposited by the petitioners in terms of Section 107(6) and Section 112(8) of the said Act of 2017 by re-crediting the same to the petitioner no.1’s electronic credit ledger within a period of two weeks from the date of communication of this order.

11. As prayed for by Mr. Chakraborty, let affidavit-of-opposition be filed within four weeks from date.

The petitioners shall be at liberty to file affidavit-in-reply, if any, within one week thereafter.

12. List this writ petition for hearing immediately after filing of the same.