2025(07)LCX0320

Raghu Steel (India)

Versus

State of Punjab

CWP- 18259-2025 decided on 07-07-2025

IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH

CWP-18259-2025
Date of Decision: 07.07.2025

M/s Raghu Steel (India)                                 ......Petitioner

                                             Vs.

State of Punjab and others                      ......Respondents

CORAM:   HON’BLE MRS. JUSTICE LISA GILL
                HON’BLE MRS. JUSTICE SUDEEPTI SHARMA

Present: Mr. Kumar Vishav Aggarwal, Advocate,
             for the petitioner.

             Mr. Saurabh Kapoor, Additional Advocate General, Punjab,
             for the respondents.

SUDEEPTI SHARMA, J.

1. Challenge in the present writ petition is to order dated 10.02.2025 passed by the Deputy Commissioner State Tax (Appeal), Ludhiana Division, Ludhiana, whereby the appeal filed by the petitioner against order dated 28.09.2023 passed by the State Tax Officer, Fatehgarh Sahib, imposing tax of Rs.2,31,452/-, interest of Rs.2,99,406/- and penalty of Rs.2,31,542/- under the Goods and Service Tax Act, 2017 (for short, ‘GST Act’) for the period of 2017-18, was dismissed.

2. Learned counsel for the petitioner contends that order dated 10.02.2025 is appealable under Section 112 of the Central Goods and Services Tax Act, 2017, (for short, ‘CGST Act’) before the learned Goods and Service Tax Tribunal (for short, ‘GST Tribunal’), but due to nonconstitution of the GST Tribunal, petitioner is unable to file an appeal, therefore, it has preferred present writ petition. He further contends that petitioner has moved an application for stay of recovery proceedings as per the guidelines issued by the Government of India, vide its Circular No.224/18/2024-GST dated 11.07.2024 and prayed for stay of recovery proceedings till the filing of the appeal and that petitioner has already deposited 10% of the tax amount and is ready to deposit 10% more of the remaining tax amount today itself. He further contends that in view of Circular No.224/18/2024-GST dated 11.07.2024, which is issued by Government of India with certain guidelines for recovery of outstanding dues till the GST Tribunal comes into operation, the recovery of remaining dues be stayed.

3. Learned counsel for the respondents does not dispute the aforesaid Circular No.224/18/2024-GST dated 11.07.2024 issued by the Government of India.

4. We have heard learned counsel for the parties and have perused the file with their able assistance.

5. The relevant portion of the aforesaid Circular No.224/18/2024- GST dated 11.07.2024 is reproduced as under:-

3. In cases, where the first appellate authority has confirmed the demand issued by the adjudicating authority, partially or fully, the taxpayers cannot file appeal against the said appellate order at present due to non-operation of GST Appellate Tribunal as yet. As per Section 112 of the CGST Act, every person has statutory remedy of appeal against the order passed by the first appellate authority or by a revisional authority, before the Tribunal. As per section 78 of CGST Act, the recovery proceedings are to be initiated, if the amount payable as per the order issued under the said act is not paid by the concerned person within the said period of three months from the date of service of the said order. It may further be noted that if any person files an appeal in accordance with the requirement of sub-section (8) of section 112 of the CGST Act (i.e., on payment of prescribed pre-deposit), the recovery proceedings for the balance amount is deemed to be stayed till disposal of the appeal as per sub-section (9) of section 112 of the CGST Act. However, as the taxpayers are not able to file appeal under section 112 in Appellate Tribunal against the orders of appellate authority and therefore, are not able to make the pre-deposit under sub-section (8) of section 112 of CGST Act, in some cases, the tax officers are taking a view that there is no stay against recovery as per sub-section (9) of section 112 of CGST Act. In some cases, taxpayers have either paid or are willing to pay the requisite amount of pre-deposit as per sub-section (8) of section 112 of CGST Act either by crediting in their electronic liability register against the demand so created, or by depositing the said amount through FORM DRC-03. However, tax officers are still resorting to recovery proceedings after completion of period stipulated under section 78 of CGST Act.

4. In order to facilitate the taxpayers to make the payment of the amount of pre-deposit as per sub-section (8) of section 112 of CGST Act, and to avail the benefit of stay from recovery of the remaining amount of confirmed demand as per subsection (9) of section 112 of CGST Act, it is hereby clarified that in cases where the taxpayer decides to file an appeal against the order of the appellate authority and wants to make the payment of the amount of pre-deposit as per sub-section (8) of section 112 of CGST Act, he can make the payment of an amount equal to the amount of pre-deposit by navigating to Services >> Ledgers>> Payment towards demand, from his dashboard. The taxpayer would be navigated to Electronic Liability Register (ELL) Part-II in which he can select the order, out of the outstanding demand orders, against which payment is intended to be made. The amount so paid would be mapped against the selected order and demand amount would be reduced in the balance liability in the aforesaid register. The said amount deposited by the taxpayer will be adjusted against the amount of pre-deposit required to be deposited at the time of filing appeal before the Appellate Tribunal.

5. The taxpayer also needs to file an undertaking/ declaration with the jurisdictional proper officer that he will file appeal against the said order of the appellate authority before the Appellate Tribunal, as and when it comes into operation, within the timelines mentioned in section 112 of the CGST Act read with Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019. On providing the said undertaking and on payment of an amount equal to the amount of pre-deposit as per the procedure mentioned in para 4 above, the recovery of the remaining amount of confirmed demand as per the order of the appellate authority will stand stayed as per provisions of sub-section (9) of section 112 of CGST Act.”

6. In view of the above said circular issued by Government of India and undertaking of the petitioner to deposit 10% of the remaining tax amount, as per requirement of Section 112(8) of the CGST Act, present writ petition is disposed of.

7. Since as per Para 5 of the circular dated 11.07.2024, as reproduced above, on providing undertaking and on payment of an amount equal to the amount of pre-deposit as per the procedure mentioned in Para 4 of the aforementioned circular, recovery of the remaining amount of confirmed demand as per the order of the appellate authority will stand stayed as per provisions of sub-section (9) of Section 112 of CGST Act, no further directions are required to be issued by this Court.

8. Writ petition is disposed of accordingly

07.07.2025

Whether speaking/reasoned: Yes / No
Whether reportable: Yes / No