Welcut Industries Vs Commissioner (Delhi High Court)
The Delhi High Court, in the case of Welcut Industries Vs Commissioner, addressed a challenge to an Order-in-Appeal dated May 23, 2025, which raised a total demand of Rs. 27,000 against the Petitioner. This impugned order is appealable before the Goods and Services Tax Appellate Tribunal (GSTAT). However, the court noted that while the GSTAT has been constituted, it is not yet functioning.
Given the absence of an operational Appellate Tribunal, the Petitioner is currently unable to exercise their statutory right to appeal under Section 112 of the Central Goods and Services Tax (CGST) Act. Under Section 112(8) of the CGST Act, filing an appeal requires the payment of a prescribed pre-deposit, and Section 112(9) stipulates that recovery proceedings for the balance amount are deemed stayed until the disposal of the appeal.
The court referenced a Circular dated July 11, 2024, which addresses this exact situation where taxpayers cannot file an appeal due to the non-operation of the GSTAT. The Circular noted that since taxpayers cannot make the pre-deposit under Section 112(8), tax officers were sometimes initiating recovery proceedings after the three-month period stipulated under Section 78 of the CGST Act.
The Circular clarified the procedure for taxpayers to make a payment equivalent to the requisite pre-deposit amount under Section 112(8). This payment can be made by navigating to the “Payment towards demand” section on the dashboard, selecting the outstanding demand order in the Electronic Liability Register (ELL) Part-II, and the amount paid would be adjusted against the demand.
