Bombay High Court Affirms GST Appellate Tribunal’s Power to Grant Interim Relief, Directs Petitioner to Approach Tribunal

In a significant judgment delivered on 20 February 2026, the Bombay High Court addressed the scope of the Goods and Services Tax Appellate Tribunal’s (GSTAT) powers to grant interim relief, including stay of recovery proceedings, under the Central Goods and Services Tax Act, 2017 (CGST Act). The case, Hongkong and Shanghai Banking Corporation Ltd. v. State of Maharashtra, was heard by Justices G.S. Kulkarni and Aarti Sathe.

The petitioner, Hongkong and Shanghai Banking Corporation Ltd., challenged recovery proceedings initiated by the State of Maharashtra following the confirmation of a tax liability under the CGST Act. After the Appellate Authority rejected the petitioner’s appeal, the petitioner filed a further appeal before the GSTAT. Despite this, the authorities issued a Recovery Notice, prompting the petitioner to approach the High Court under Article 226 of the Constitution, seeking quashing of the recovery and interim protection against coercive action.

The Revenue argued that the petitioner should have sought interim relief from the Tribunal itself, as the CGST Act provides an efficacious alternative remedy. The petitioner, however, contended that the Tribunal lacked express statutory authority to grant interim orders, necessitating recourse to the High Court.

The Court undertook a detailed analysis of the relevant statutory provisions, including Sections 111, 112, and 113 of the CGST Act, which govern the constitution, procedure, and powers of the Appellate Tribunal. The Court noted that Section 113(1) empowers the Tribunal to pass such orders as it thinks fit on appeals, and that Section 111 allows the Tribunal to regulate its own procedure, guided by principles of natural justice. The Court also referred to the recently notified GSTAT (Procedure) Rules, 2025, which expressly recognize the Tribunal’s inherent powers to make necessary orders and provide for interlocutory applications, including for stay.

Drawing on the Supreme Court’s decision in Income Tax Officer, Cannanore v. M.K. Mohammed Kunhi, the High Court emphasized that the power to grant interim relief is incidental and necessary to the effective exercise of appellate jurisdiction, even if not expressly stated. The Court rejected the petitioner’s argument that the absence of an explicit provision precluded the Tribunal from granting interim relief, holding that such a restrictive interpretation would render the appellate remedy illusory and defeat legislative intent.

The Court concluded that the GSTAT has the jurisdiction to grant interim orders, including stay of recovery, and that parties aggrieved by recovery proceedings pending appeal should approach the Tribunal for such relief. The High Court clarified that it is not the appropriate forum for interim protection in matters falling squarely within the Tribunal’s appellate jurisdiction.

In view of the urgency caused by the Recovery Notice, the Court granted the petitioner limited interim protection, restraining the authorities from acting on the notice until the petitioner could file an interim application before the Tribunal. The Court directed that if the electronic portal did not permit such filing, the application could be submitted manually, and instructed the Tribunal’s Registry to make necessary arrangements for electronic filing of interim applications.

The judgment expressly left all issues on the merits open for consideration by the Tribunal and disposed of the writ petition without costs. This decision clarifies the GSTAT’s powers and reinforces the principle that statutory appellate forums are the appropriate venues for seeking interim relief in tax matters.