The Gujarat High Court has refused to direct the refund of GST dues recovered from a taxpayer before the filing of an appeal before the Goods and Services Tax Appellate Tribunal (GSTAT), holding that the assessee failed to comply with the statutory timeline and procedural safeguards prescribed under the CGST Act and the CBIC Circular dated July 11, 2024. 

The bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati observed that ignorance of the circular could not be pleaded as a defence and that directing a refund after recovery would effectively amount to waiving the mandatory pre-deposit requirement, which is impermissible. 

The dispute arose after an Order-in-Appeal dated November 4, 2025, was passed against the petitioner. Following the appellate order, the tax authorities recovered the disputed tax amount within approximately 20 days.

Buy Now: June 2026 Ultimate Legal & Taxation Combo

Subsequently, the Central Government notified the operationalization of the GST Appellate Tribunal through a notification dated September 17, 2025. Although the original deadline for filing appeals before the Tribunal was April 1, 2026, the time limit was later extended to July 31, 2026.

The petitioner eventually filed an appeal before the GST Appellate Tribunal on June 30, 2026, and thereafter approached the High Court seeking a direction to refund the amount already recovered by the department. The petitioner relied upon decisions of the Andhra Pradesh, Calcutta and Patna High Courts, which had granted relief in similar circumstances where recoveries had been made before Tribunal appeals could be effectively pursued. 

The petitioner argued that since the last date for filing appeals before the GST Appellate Tribunal had been extended until July 31, 2026, the amount already recovered by the department ought to be refunded.

It was contended that several High Courts had recognized the taxpayer’s right to seek restoration of amounts recovered pending Tribunal remedies, particularly during the transitional period before the GSTAT became fully operational.

The State opposed the petition by relying upon CBIC Circular No. 224/18/2024-GST dated July 11, 2024, which lays down the mechanism for recovery proceedings where the first appellate authority has decided the matter but the Tribunal is yet to become operational.

According to the State, the Circular grants protection from recovery only if the taxpayer pays the statutory pre-deposit amount; furnishes an undertaking to file an appeal before the Tribunal; and does so within the limitation prescribed under Section 112 of the CGST Act.

Since the petitioner filed the Tribunal appeal nearly seven months after the appellate order and had not complied with the Circular’s requirements within the prescribed three-month period, the department argued that no refund could be granted. 

The High Court closely examined paragraphs 4, 5 and 6 of CBIC Circular No. 224/18/2024-GST.

The Bench observed that the Circular creates a clear framework enabling taxpayers to obtain a statutory stay against recovery. A taxpayer intending to challenge an appellate order before the GST Appellate Tribunal must deposit the required pre-deposit amount; furnish an undertaking declaring that the appeal will be filed within the prescribed limitation; and file the Tribunal appeal within the period contemplated under Section 112 of the CGST Act read with the Removal of Difficulties Order.

The Court noted that the petitioner failed to comply with each of these requirements.

The Bench further observed that although the Tribunal appeal was eventually filed on June 30, 2026, it was instituted almost seven months after the appellate order dated November 4, 2025, long after the statutory three-month period contemplated under the Circular.

Rejecting the petitioner’s explanation that it was unaware of the CBIC Circular, the Court reiterated the settled legal principle that ignorance of law cannot excuse non-compliance.

According to the Court, the petitioner ought to have followed the statutory procedure if it intended to protect itself against recovery proceedings.

The High Court also held that directing the department to refund the recovered amount would effectively waive the statutory pre-deposit requirement contemplated under Section 112 of the CGST Act.

The Bench observed that such a direction would be contrary to the statutory framework governing GST appeals.

It further noted that the GST Appellate Tribunal remains fully empowered to examine all issues raised by the petitioner in the pending appeal.

The Court declined to rely upon the judgments cited by the petitioner from the Andhra Pradesh, Calcutta and Patna High Courts.

It observed that those decisions had not considered the effect of CBIC Circular No. 224/18/2024-GST dated July 11, 2024, which specifically prescribes the procedure for obtaining protection against recovery during the interim period before the Tribunal became operational.

Accordingly, those precedents were held to be distinguishable.

The Gujarat High Court held that the petitioner was not entitled to any refund of the amount already recovered because it had failed to comply with the procedural safeguards prescribed under the CBIC Circular and had filed the Tribunal appeal beyond the stipulated period. 

The Court concluded that granting such relief would amount to an impermissible waiver of the statutory pre-deposit requirement, while leaving it open to the GST Appellate Tribunal to adjudicate the merits of the pending appeal. 

Membership Required to Access Case Details & Order Copy

To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.

Read More: Amendment to Company Petition Can Be Allowed Even If Limitation Is Disputed: NCLAT