No Recovery of Outstanding GST Demand Once Pre-Deposit made and Undertaking Filed Pending Tribunal Setup: Chhattisgarh HC [Read Order]
The court observed that as per the GST circular, taxpayers may deposit the pre-deposit online and file an undertaking to approach the Tribunal, upon which recovery of the remaining demand automatically stands stayed under Section 112(9)
The Chhattisgarh High Court has held that no recovery of outstanding GST ( Goods and Services Tax ) demand can be made once a taxpayer deposits the statutory pre-deposit under Section 112(8) of the CGST Act and files an undertaking to approach the Appellate Tribunal when it becomes functional.
The Court, relying on CBIC Circular No. 224/18/2024-GST dated 11 July 2024 clarified that upon such compliance, recovery of the remaining confirmed demand stands automatically stayed under Section 112(9).
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The petitioner, Archita Soap And Chemical LLP had challenged the order dated 9 September 2024, passed by the Joint Commissioner (Appeals) under Section 107(11) of the CGST/Chhattisgarh GST Act, 2017, as well as the rejection of its rectification application under Section 161 on 10 March 2025.
The petitioner contended that in view of the Finance Ministry’s circular, taxpayers are entitled to protection from recovery of outstanding demands once they make the statutory pre-deposit under Section 112(8) and file an undertaking to approach the Appellate Tribunal when it becomes functional.
Justice Deepak Kumar Tiwari, hearing the matter, noted that the circular explicitly provides that taxpayers can deposit the pre-deposit amount through their GST portal and simultaneously furnish an undertaking to the jurisdictional officer that they will file an appeal before the Tribunal once operational. After that, recovery of the remaining confirmed demand stands automatically stayed under Section 112(9).
The Court observed that “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 Court is of the considered opinion that nothing remains for adjudication in this Writ Petition.”
Accordingly, the Court reserved liberty in favour of the petitioner to comply with Circular No. 224/18/2024-GST by filing the requisite undertaking and depositing the pre-deposit within 15 days of receiving the order. It clarified that if the amount is not deposited within the stipulated period, the order would lose its efficacy and recovery proceedings could resume.
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