GST Appellate Tribunal has Inherent Power to Grant Interim Relief: Bombay HC in HSBC Case [Read Order]

The Bombay High Court held that the Goods and Services Tax (GST) Appellate Tribunal has the inherent power to grant interim relief, including protection against recovery proceedings, observing that such power is incidental and necessary to its appellate jurisdiction.

The petitioner, The Hongkong and ShanghaiBanking Corporation Ltd (HSBC), filed a writ petition challenging recovery notices issued by the Revenue during the pendency of its appeal before the GST Appellate Tribunal.

An Order-in-Original was passed against the petitioner on 18th December 2023. The petitioner’s appeal was rejected by the appellate authority on 12 June 2024. Thereafter, the petitioner filed an appeal before the GST Tribunal against the Order-in-Appeal on 5th February 2026.

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Despite the appeal being pending, a Recovery Notice dated 6th February 2026 was issued and the steps were initiated to enforce the demand. Aggrieved by the coercive recovery proceedings, the petitioner approached the High Court.

Himanshu Takke, the counsel representing the Revenue Department, contended that once the Appeal is pending before the Tribunal, the Petitioner ought to have sought interim relief from the Tribunal itself.

It was also contended that the Petitioner has an efficacious alternative remedy, under Section 112(9) of the Central Goods and Services Tax (CGST) Act, 2017, which provides that upon payment of the prescribed pre-deposit under Section 112(8), recovery proceedings for the balance amount shall be deemed to be stayed till disposal of the appeal.

Prasad Paranjape, the counsel for the petitioner, submitted that there is no provision either under the CGST Act or the Rules framed thereunder empowering the Tribunal to grant an interim order staying recovery proceedings.

It was also contended by the petitioner counsel that the Petitioner had no efficacious alternative remedy and was constrained to approach this Court under Article 226 of the Constitution of India

Justice G.S. Kulkarni and Justice Aarti Sathe examined Sections 111, 112 and 113 of the CGST Act. The Court observed that Section 113 empowers the Tribunal to pass such orders “as it thinks fit,” and that the power to grant interim relief, including protection against recovery during the pendency of an appeal, is inherent and incidental to the appellate jurisdiction conferred upon the Tribunal.

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The Court relied on the Supreme Court’s decision in Income Tax Officer, Cannanore vs. M.K. Mohammed Kunhi, wherein the Supreme Court, interpreting Section 254 of the Income Tax Act being a provision quite similar to Section 113 of the CGST Act, held that although there was no express provision conferring upon the Appellate Tribunal the power to stay recovery of tax or penalty during the pendency of an appeal, such power must be regarded as incidental and necessary to its appellate jurisdiction.

Accordingly, the Court held that the petitioner ought to move an appropriate interim application before the GST Appellate Tribunal and seek relief therein.

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