Chhattisgarh High Court Clarifies Recovery of GST Dues Stayed Upon Pre-Deposit and Undertaking Pending Appellate Tribunal Functioning

Background: The petitioner challenged orders passed under the Chhattisgarh GST Act, 2017, seeking to quash the orders and recovery notices, and to direct the grant of Input Tax Credit for transactions with specified entities. The petitions arose in the context of the non-constitution of the GST Appellate Tribunal, which prevented the filing of statutory appeals under Section 112 of the CGST Act.

Submissions and Circulars: The petitioner relied on Circular No.224/18/2024-GST dated 11.07.2024 issued by the Central Board of Indirect Taxes and Customs (CBIC), which provides guidelines for recovery of outstanding dues in cases where the first appeal has been disposed of but the Appellate Tribunal is not yet operational. The circular clarifies that taxpayers intending to appeal may make the required pre-deposit and file an undertaking/declaration with the jurisdictional proper officer, stating their intention to file an appeal before the Tribunal once it becomes functional. Upon compliance, recovery of the remaining demand is stayed as per Section 112(9) of the CGST Act. The petitioner also referred to a notification dated 17.09.2025, which sets out timelines for filing appeals before the Tribunal once it is constituted.

Court’s Reasoning: The Court noted the existence of explicit guidelines for recovery in such transitional situations and observed that the CBIC circulars and notifications provide a clear mechanism for taxpayers to secure a stay on recovery by making the pre-deposit and submitting the required undertaking. The State did not oppose the petitioner’s request for liberty to avail this alternative remedy.

Legal Principle and Directions: The High Court held that, in light of the CBIC circular and the statutory framework, the petitioner is at liberty to comply with the conditions set out in Circular No.224/18/2024-GST. Specifically, the petitioner may file an undertaking/declaration with the jurisdictional proper officer, committing to file an appeal before the Appellate Tribunal within the prescribed timelines, and must pay the pre-deposit as required under Section 112(8) of the CGST Act within 15 days of receiving the order, if not already paid. Upon such compliance, recovery of the remaining demand shall remain stayed as per Section 112(9) of the CGST Act.

The Court made it clear that failure to deposit the pre-deposit within the stipulated period would render the order ineffective. With these directions, the writ petitions were disposed of.

Conclusion: This decision clarifies the interim protection available to taxpayers aggrieved by appellate orders under the CGST Act during the period when the GST Appellate Tribunal is not operational. The ruling affirms that recovery proceedings must be stayed if the taxpayer fulfills the conditions of pre-deposit and undertaking as per the CBIC circular, thereby safeguarding the right to appeal and ensuring procedural fairness.