No coercive recovery action till full disposal of appeal by GSTAT please.

The field formation behave in such a manner that each and every sub sections of the CGST Act, 2017 are meant only for violation by the tax officials under the pretext that officer have no power, interpretation issues etc. Today is the case for sub section 9 of section 112 of the CGST Act, 2017 where the wordings are very clear and under no stretch of imagination, a different interpretation is possible. However, despite the fact that appeal before GSTAT was filed on 05/02/2026 itself ( as against available time limit up to 30/06/2026), recovery action was taken by department by issuing recovery notice on the next day on which the appeal was filed before GSTAT.

Section 112 (9) is reproduced for ready reference. Where the appellant has paid the amount as per sub-section (8), the recovery proceedings for the balance amount shall be deemed to be stayed till the disposal of the appeal.

Under the above backdrop, the taxpayer filed a writ under article 226 before high court of Bombay as there was no clarity on whether GSTAT can pass interim orders on filing the appeal when the circumstances warrant.

The High Court has examined this issue and ruled that the taxpayer may approach the GSTAT for interim order. The relevant extracts of High Court read as 'the power to grant interim relief, including protection against recovery pending the Appeal, is inherent and incidental to the appellate jurisdiction conferred upon the Tribunal. Thus, the appellate power of the Tribunal being wide in its sweep, necessarily wields with the appellate tribunal, the authority and jurisdiction to pass appropriate interim orders relevant to subject matter of the appeal, so as to make the appellate remedy effective'. (para 10)

But the questions arising out of the above case still stand unanswered. Who has given the powers to Department when recovery proceedings are absolutely not possible as per section 112(9). Why the department is not agreeing to pass an order in favour of taxpayer based on the above writ but only insist on re-approaching GSTAT again?.

Can we expect some instructions from CBIC to arrest the similar occurrences based on the Division Bench order in the above case?.

Whether can we expect departmental action against the officer who initiated recovery proceedings which is impermissible in law?

Who will bear the cost of litigation for an error committed by the tax officer?.

Why the mindset of tax officials still continue as it was prior to setting up of GSTAT benches across India?.

Can we expect some positive response on the above issues from the concerned?.

The GSTAT is functional now and it is possible to file appeals online as observed from e -filing GSTAT portal that so far 2139 appeals have already been filed out of which 390 pertain to the current month alone. Accordingly, it is expected that officers at both State as well as Central level must pass only reasoned orders to avoid criticism by GSTAT at a later date.

The Bombay High Court has examined at length and concluded that GSTAT has inherent powers to deal the appeal filed before the Tribunal in an appropriate way. It is the case of The Hongkong and Shanghai Banking Corporation Ltd. Versus State of Maharashtra through the Secretary to the Government Revenue Dept & Ors. - 2026 (2) TMI 1389 - BOMBAY HIGH COURT, order passed on 20/02/2026 by the Division Bench.

Para 11 of the above order is also worth to read which is reproduced. 'pending the Appeal, is inherent and incidental to the appellate jurisdiction conferred upon the Tribunal. Thus, the appellate power of the Tribunal being wide in its sweep, necessarily wields with the appellate tribunal, the authority and jurisdiction to pass appropriate interim orders relevant to subject matter of the appeal, so as to make the appellate remedy effective'.

Interim relief has been granted by directing authorities not to proceed further on recovery and para 17, which is the crux of this case is as below: ' At this stage, we are informed that the electronic portal does not provide for filing of an interim application. If that be so, we permit the Petitioner to file the interim application manually. We also direct that the Registry of the Tribunal makes an appropriate provision on the portal to enable filing of such interim applications'.

The issue handled by the High Court is of paramount importance as the tax officials are expected to proceed with recovery proceedings as usual and accordingly, taxpayers as well as tax professionals may immediately approach the jurisdictional bench of the GSTAT for relief from recovery based on the above case.