The Delhi High Court has granted interim protection to a taxpayer against recovery proceedings under the Goods and Services Tax (GST) regime, observing that the Goods and Service Tax Appellate Tribunal (GSTAT), though constituted, is yet to become operational.
A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain delivered the ruling while disposing of a writ petition challenging an Order-in-Appeal dated May 23, 2025, through which a total demand of Rs. 27,000 had been raised against the petitioner.
The main grievance before the Court was that while the Order-in-Appeal was appealable before the GST Appellate Tribunal under Section 112 of the CGST Act, the Tribunal is not yet functioning, effectively leaving taxpayers without a statutory remedy to challenge such orders.
The Court noted that this situation has led to practical hardships for taxpayers, as recovery proceedings are being initiated despite their inability to file appeals before the Tribunal.
The Bench relied on the CBIC Circular dated July 11, 2024, which clarified that taxpayers who intend to file appeals before the Tribunal may deposit the prescribed pre-deposit amount (10% of the disputed tax) even before the Tribunal becomes operational.
The circular further provides that once such payment is made and an undertaking is filed with the jurisdictional officer confirming intent to appeal when the Tribunal starts functioning, recovery proceedings for the balance demand shall remain stayed under Section 112(9) of the CGST Act.
Applying the principles of the circular, the Court directed the petitioner to deposit 10% of the demanded amount (₹2,700) by November 15, 2025; and file an undertaking that an appeal will be lodged before the Appellate Tribunal once it becomes operational.
The Bench held that upon compliance with these directions, the order of the Appellate Authority would remain stayed. The Court also clarified that the amount deposited shall be treated as the pre-deposit for the appeal when filed before the Tribunal.
Case Details
Case Title: M/S Welcut Industries Versus Commissioner, Cgst, Delhi, North Commissionerate And Anr.
Case No.: W.P.(C) 15495/2025 & CM APPL. 63400/2025
Date: 09/10/2025
Counsel For Petitioner: Aditya Jain
Counsel For Respondent: Ruchesh Sinha, Sr. St. Counsel
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