The Madras High Court held that GST recovery can’t proceed before expiry of GST Appellate Tribunal (GSTAT) appeal period.

The bench of Justice Senthilkumar Ramamoorthy has restrained the Goods and Services Tax authorities from taking further action pursuant to a recovery notice issued before the expiry of the limitation period available to the taxpayer for filing an appeal before the GST Appellate Tribunal.

The Court took note of the documentary evidence showing that the appellate order was communicated to the taxpayer only on May 14, 2026. Since the limitation period had to be calculated from the date of communication of the order, the Court observed that the taxpayer still had time to approach the GST Appellate Tribunal.

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“Reckoned from the date of communication of the appellate order, the limitation period for filing further appeal before the GST appellate tribunal is still available,” the Court observed.

Accordingly, the High Court directed the GST authorities not to take any further proceedings pursuant to the recovery notice until September 13, 2026.

The petitioner/assessee is a company which sought the quashing of Order-in-Appeal passed by the Joint Commissioner of GST and Central Excise (Appeals). The company also challenged the consequential recovery notice issued on August 1, 2026.

The petitioner submitted that although the appellate order was dated December 30, 2025, it was received by the company only on May 14, 2026. Therefore, the statutory period available for filing a further appeal before the GST Appellate Tribunal had not expired when the recovery notice was issued.

It was argued that the department initiated recovery without waiting for the taxpayer’s statutory appeal period to conclude. The petitioner contended that commencing recovery in such circumstances deprived it of a meaningful opportunity to pursue the appellate remedy available under the GST framework.

The petitioner further alleged that the appellate order had travelled beyond the scope of the appeal filed by the department.

The department argued that the appellate authority was empowered to direct the recovery of input tax credit allegedly availed of wrongly. It was also submitted that a fresh determination of the amount was not required before initiating recovery.

The High Court, however, considered it significant that the petitioner had produced evidence establishing May 14, 2026, as the date on which the appellate order was received.

On calculating the limitation period from that date, the Court found that the time available for filing the further appeal had not expired. It consequently granted limited protection against recovery so that the petitioner’s right to approach the GST Appellate Tribunal was not defeated by premature coercive proceedings.

The High Court did not examine or decide the merits of the disputed input tax credit demand or the petitioner’s allegation that the appellate authority had exceeded the scope of the department’s appeal.

Instead, it confined the relief to the timing of the recovery proceedings and directed the respondents not to proceed further under the recovery notice until September 13, 2026.

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