Bombay HC: Department Cannot Initiate Coercive Action During GST Statutory Appeal Period:

Bombay HC: Department Cannot Initiate Coercive Action During GST Statutory Appeal Period The Bombay High Court restrained GST authorities from taking coercive recovery action against the petitioner for four weeks to enable it to file an appeal before the GST Tribunal within the statutory time limit. The present petition has been filed by Matrix Cellular (International) Services Pvt. Ltd against the Deputy Commissioner of State Tax, challenging the order dated February 18, 2026, passed by the Joint Commissioner of State Tax.

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Background of the case The petitioner informed the Court that it intends to file an appeal before the GST Tribunal against the February 18, 2026, order. As per Section 112 of the CGST Act, read with a Government Notification dated September 17, 2025, the time limit to file such an appeal is up to June 30, 2026. However, the petitioner argued that despite the statutory time available to file the appeal, the department had started taking coercive steps to recover the tax dues. The petition was therefore filed seeking a direction to restrain the authorities from initiating recovery proceedings or demanding any pre-deposit until the writ petition was decided. After hearing both sides, the Court observed that when a statutory remedy of appeal is available, and the petitioner intends to avail it within the prescribed period, that remedy should not be rendered meaningless by initiating recovery proceedings before the expiry of the appeal period. The Court also noted that under the law, if the petitioner files an appeal, a pre-deposit of 10% of the tax amount would be required, and in such circumstances, recovery proceedings would not ordinarily be pursued.

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Recording the petitioner’s statement that it would file an appeal along with a stay application before the GST Tribunal on or before June 30, 2026, the Court directed that no coercive action shall be taken against the petitioner for a period of four weeks to enable filing of the appeal. The Court clarified that if the petitioner fails to file the appeal within the permitted time, the department would be at liberty to proceed with recovery in accordance with the law. All contentions of both parties were kept open. The petition was disposed of without any order as to costs.