2026 (3) TMI 1050 - HC - GST

Stay of recovery through prescribed undertaking and pre-deposit permitted upon timely compliance with appeal timelines.

Petitioner seeks procedural relief to stay recovery of remaining confirmed GST demand by filing the prescribed undertaking and making a pre-deposit ... Entitlement to relief by filing an undertaking and making the pre-deposit in terms of Circular No. 224/18/2024-GST - Availability of procedural remedy - staying recovery of the remaining confirmed demand under sub-section (9) of Section 112. Alternative mechanism for pre-deposit and stay pending constitution of Appellate Tribunal - HELD THAT:- The Court noted the Central Board of Indirect Taxes and Customs circular laying down a procedure by which a taxpayer may (i) pay an amount equivalent to the statutory pre-deposit through the electronic liability register and (ii) file an undertaking with the jurisdictional proper officer to file an appeal before the Appellate Tribunal when it comes into operation, whereupon recovery of the remaining confirmed demand would stand stayed under the statutory scheme. Having found those guidelines applicable and there being explicit instructions for recovery in such cases, the Court concluded that no substantive adjudication remained necessary and granted the petitioner liberty to comply with the circular and statutory pre-deposit requirement. The Court made compliance time-bound and conditioned the stay of recovery upon filing the undertaking and payment of the equivalent pre-deposit within the period specified in the order, failing which the order would cease to have effect. [Paras 5, 6, 10, 11, 12] Liberty granted to the petitioner to file the prescribed undertaking and make the pre-deposit by following the circular procedure within the time directed; on such compliance recovery shall be stayed as provided under the statute and the circular, and failure to deposit within the stipulated period will render the order ineffective. Final Conclusion: The writ petition is disposed of by granting the petitioner liberty to invoke the circular procedure: file the required undertaking with the proper officer and make the equivalent pre-deposit within the period directed, whereupon recovery of the remaining demand shall be stayed as provided; the order will lapse if the conditions are not complied with within the specified time. Issues: Whether the petitioner is entitled to relief by filing an undertaking and making the pre-deposit in terms of Circular No. 224/18/2024-GST dated 11.07.2024 and related notifications, thereby staying recovery of the remaining confirmed demand under sub-section (9) of Section 112 of the Central Goods and Services Tax Act, 2017.Analysis: The petition challenges orders under provisions of the Chhattisgarh Goods & Services Tax Act, 2017 and the relief sought relates to availability of procedural remedy under central guidelines issued by the Central Board of Indirect Taxes and Customs. Circular No. 224/18/2024-GST dated 11.07.2024 prescribes that where an aggrieved taxpayer decides to file an appeal before the Appellate Tribunal (when constituted), the taxpayer may deposit an amount equal to the pre-deposit through the electronic ledger procedure and file an undertaking/declaration with the jurisdictional proper officer that an appeal will be filed within the timelines specified in Section 112 of the Central Goods and Services Tax Act, 2017; upon compliance, sub-section (9) of Section 112 provides for stay of recovery of the remaining demand. Notification No. S.O. 4220(E) dated 17.09.2025 fixes timelines for filing appeals before the Appellate Tribunal in respect of orders communicated up to specified dates. The petition does not press any distinct substantive challenge that conflicts with these guidelines; instead, the petitioner seeks liberty to avail the procedural mechanism set out in the circular and notification. The State does not oppose the grant of such liberty.Conclusion: Liberty is granted to the petitioner to file the undertaking/declaration and to deposit an amount equal to the pre-deposit in accordance with Circular No. 224/18/2024-GST dated 11.07.2024 and Notification No. S.O. 4220(E) dated 17.09.2025; on such compliance within 15 days from receipt of the order, recovery of the remaining confirmed demand shall remain stayed under sub-section (9) of Section 112 of the Central Goods and Services Tax Act, 2017. Failure to deposit the required amount within the stipulated period will render the order ineffective.Final Conclusion: The petition is disposed of by permitting the petitioner to avail the alternative recovery mechanism under the specified circular and notification subject to timely compliance with the undertaking and pre-deposit conditions, resulting in conditional interim relief in favour of the petitioner.Ratio Decidendi: Compliance with Circular No. 224/18/2024-GST dated 11.07.2024 by filing the prescribed undertaking and depositing an amount equal to the statutory pre-deposit effects a stay of recovery of the remaining confirmed demand under sub-section (9) of Section 112 of the Central Goods and Services Tax Act, 2017, provided such compliance is within the timelines specified by the applicable notification.