2026 (2) TMI 1389 - HC - GST

Interim Relief: appellate forum may grant stay of recovery; limited interim protection can enable filing of an interim application.

Whether an appellate forum under the CGST framework may grant interim reliefs and whether a superior court should grant interim protection to permit ... Appellate jurisdiction - power to grant interim orders - incidental powers - stay of recovery pending appeal - Scope of Section 111 - procedure before the Appellate Tribunal - power to regulate procedure - inherent powers - principles of natural justice - Whether the Goods and Services Tax Appellate Tribunal (‘the Tribunal’), in its constitution under the Central Goods and Services Tax Act, 2017(CGST Act), has jurisdiction to pass interim orders. - HELD THAT:- Chapter XVIII of the CGST Act provides for Appeals and Revisions. Section 109 deals with the constitution of the Appellate Tribunal. Section 111 provides for the procedure before the Appellate Tribunal. Section 112 provides for Appeals to the Appellate Tribunal. Section 113 provides for orders of the Appellate Tribunal. In our opinion, the aforesaid provisions are required to be read conjointly. Sub-section (1) of Section 111 provides that the Appellate Tribunal, while disposing of any proceedings or an Appeal before it, shall be bound by the procedure laid down in the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice and, subject to the other provisions of the Act and the Rules framed thereunder, shall have the power to regulate its own procedure. Sub-section (2) of Section 111 provides that the Appellate Tribunal shall, for the purpose of discharging its functions under the Act, have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 while trying a suit, in respect of matters specified in clauses (a) to (h) therein. Sub-section (3) provides that any order made by the Appellate Tribunal may be enforced by it in the same manner as if it were a decree made by a Court in a suit pending therein, and it shall be lawful for the Appellate Tribunal to transmit its order for execution to the Court within the local limits of whose jurisdiction the subject matter is situated, as contemplated under clauses (a) and (b). Sub-section (4) provides that all proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of Sections 193 and 228 of CGST Act and for the purposes of Section 196 of the Indian Penal Code, 1860 and that the Appellate Tribunal shall be deemed to be a Civil Court for the said purposes. Considering the nature of the powers conferred under sub-section (1) of Section 113 to pass such orders “as it thinks fit”, in our opinion, it cannot be inferred, that although the Tribunal is vested with the jurisdiction to pass substantive final orders on the Appeal to confirm, modify or annul the decision or order appealed against, or may refer the case back to the Appellate Authority or the Revisional Adjudicating Authority with appropriate directions as it may think fit, for a fresh adjudication or decision in the manner as provided in sub-section (1) of Section 113, it would nonetheless lack jurisdiction to pass appropriate interim orders. 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. Also, on first principles, we are unable to accept a proposition that although the Appellate Tribunal is a statutory forum created under the scheme of Sections 111, 112 and 113 of the CGST Act, 2017, it would nevertheless be powerless to grant interim relief. Such an interpretation would render the appellate remedy illusory and defeat the legislative intent, cumulatively and wholesomely gathered from the provisions as noted hereinabove, surrounding the constitution of the Appellate Tribunal. Thus, we are not inclined to accept the Petitioner’s contention that the Tribunal lacks jurisdiction to grant interim reliefs of the nature sought. Consequently, we are of the opinion that the Petitioner ought to move an appropriate interim application before the Appellate Tribunal and invite appropriate orders in the pending Appeal. Considering that the Petitioner has approached this Court urgently in view of the Recovery Notice dated 6th February 2026, we deem it appropriate and in the interests of justice, to grant limited interim protection to the petitioner, so as to enable the Petitioner to approach the Appellate Tribunal. Accordingly, the Petitioner is at liberty to file an interim application before the Appellate Tribunal within a period of two weeks from today. Till such interim application is filed and decided by the Tribunal, the Recovery Notice dated 6th February 2026 shall not be acted upon by the Respondents. The Petition is disposed of in the aforesaid terms. Issues: (i) Whether the Appellate Tribunal constituted under the Central Goods and Services Tax Act, 2017 is empowered to pass interim orders including stay of recovery pending disposal of appeals; (ii) Whether limited interim protection against recovery should be granted by the High Court pending filing and disposal of an interim application before the Tribunal.Issue (i): Whether the Appellate Tribunal has jurisdiction to pass interim orders including stay of recovery pending disposal of appeals.Analysis: Sections 111, 112 and 113 of the Central Goods and Services Tax Act, 2017 read together confer appellate jurisdiction, power to regulate procedure and powers analogous to a civil court on the Appellate Tribunal and permit the Tribunal to pass orders 'as it thinks fit' after hearing the parties. The Tribunal's procedural rules (Goods and Services Tax Appellate Tribunal (Procedure) Rules, 2025) recognise interlocutory applications and preserve inherent powers to make orders necessary to meet ends of justice and prevent abuse of process. By necessary implication, powers incidental and conducive to making the appellate jurisdiction effective include power to grant interim reliefs such as protection against recovery pending disposal of appeals.Conclusion: The Appellate Tribunal is empowered to pass interim orders, including orders staying recovery pending disposal of appeals.Issue (ii): Whether the High Court should grant limited interim protection against a recovery notice until the petitioner files and the Tribunal decides an interim application.Analysis: The availability of an efficacious alternative remedy before the Tribunal is material to the exercise of writ jurisdiction. Given that the Tribunal has jurisdiction to entertain interlocutory applications and the Tribunal's rules provide for filing and disposal of such applications, the appropriate course is to require the applicant to move the Tribunal. However, where urgent recovery steps are threatened and the applicant has not yet been able to file before the Tribunal, limited interim protection to enable filing and disposal of an interim application is appropriate. Such protection must be confined to preserving status quo pending Tribunal consideration and must not decide merits of the appeal.Conclusion: Limited interim protection is granted to enable filing of an interim application before the Tribunal; respondents are restrained from acting on the recovery notice until the interim application is filed and decided.Final Conclusion: The appellate remedy before the Appellate Tribunal includes power to grant interim reliefs; petitioners must seek interim relief from the Tribunal, but limited interim protection may be granted by the High Court to enable the petitioner to approach the Tribunal without prejudice to the merits.Ratio Decidendi: Where statutory provisions confer broad appellate powers and procedural rules preserve inherent powers, the appellate forum possesses by necessary implication the incidental authority to grant interim reliefs, including stay of recovery, to make the appellate remedy effective.