The Madras High Court has granted a conditional interim stay on a GST revision order challenged by Nissan Motor India Private Limited, permitting the automobile manufacturer to deposit ₹2.5 crore through its electronic credit ledger.
The bench of Justice Senthilkumar Ramamoorthy passed the interim order while hearing Nissan Motor India’s writ petition questioning the exercise of revisional jurisdiction under Section 108 of the applicable GST enactments.
The Court directed Nissan Motor India to deposit ₹2.5 crore within 30 days from the date of receipt of a copy of the order. Subject to compliance with this condition, the GST revision order dated May 27, 2026, will remain stayed.
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The matter arose after the GST authorities passed an order against the company by invoking the revisional powers provided under Section 108. Nissan Motor India approached the High Court contending that the revisional jurisdiction had not been validly exercised.
Appearing for the company, counsel Joseph Prabakar argued that Section 108 should be construed as an exceptional provision, particularly because the GST Department has the option of filing an appeal under Section 107 of the GST enactments.
Section 107 provides the statutory appellate mechanism against specified decisions and orders passed by GST authorities. Section 108, on the other hand, empowers the revisional authority to examine the record of proceedings and interfere with an order passed by a subordinate adjudicating authority if the statutory conditions for revision are satisfied.
The petitioner relied on the Delhi High Court’s decision in HCC VCCL Joint Venture v. Union of India, reported in 2025 (94) GSTL 309. Nissan’s counsel submitted that the Delhi High Court had examined the exercise of revisional jurisdiction under Section 108 in that case and held that the power had been improperly exercised.
It was further submitted that a similar refund claim made by Nissan Motor India had been questioned by the authorities on an earlier occasion. According to the petitioner, its explanation in relation to that refund claim was accepted. On this basis, the company argued that the impugned revision order warranted interference by the High Court.
Additional Government Pleader (Tax) I. Dinesh accepted notice on behalf of the State authorities. Opposing the petitioner’s submissions at the preliminary stage, the State contended that the revisional power under Section 108 could be exercised as long as the case did not fall within the restrictions contained in Section 108(2). The State sought time to file its counter-affidavit.
Upon a prima facie examination of the record, the High Court observed that the case did not appear to fall within the scope of Section 108(2). However, the Court said it was still necessary to examine whether the case fell within any of the statutory limbs contained in Section 108(1).
The observation assumes significance because the revisional power cannot be invoked merely as an alternative to the appellate remedy. The legality of the revision would depend on whether the conditions expressly prescribed under Section 108(1) were satisfied.
The Court has not delivered a final ruling on this question and will examine it after the respondents place their counter on record.
The High Court also took note of an earlier similar order challenged by Nissan Motor India. In that proceeding, the company had been granted interim protection subject to depositing ₹1.5 crore.
Considering the earlier proceedings and the facts of the present case, the Court granted an interim stay subject to the higher deposit of ₹2.5 crore.
Significantly, the Court expressly permitted Nissan Motor India to discharge the conditional deposit through its electronic credit ledger. This means the company is not required, under the interim direction, to make the entire deposit in cash and may utilise the eligible input tax credit available in its GST electronic credit ledger.
The Court also found that the Union of India, represented through the Revenue Secretary, and the Principal Chief Commissioner of Central Excise and GST were neither necessary nor proper parties to the proceedings.
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