The Gujarat High Court, in M/s Mahesh Enterprises v. State of Gujarat & Others, examined whether a taxpayer could seek refund of an amount recovered pursuant to an appellate order after subsequently filing an appeal before the Goods and Services Tax Appellate Tribunal. The Court considered the statutory appellate framework under Section 112 of the Central Goods and Services Tax Act, 2017 and the procedure prescribed by CBIC Circular No. 224/18/2024-GST dated 11 July 2024.
The matter was decided by a Division Bench comprising Justice A.S. Supehia and Justice Vaibhavi D. Nanavati in R/Special Civil Application No. 7422 of 2026 on 7 July 2026. The judgment carries the neutral citation 2026:GUJHC:42336-DB.
Background of the Dispute
An Order-in-Appeal was passed against the petitioner on 4 November 2025. Approximately 20 days thereafter, the tax amount arising from the appellate order was recovered by the department.
The petitioner subsequently filed an appeal before the Goods and Services Tax Appellate Tribunal on 30 June 2026. It was argued that, since the notified deadline for filing appeals before the Tribunal had been extended, the amount already recovered should be refunded. In support of this contention, reliance was placed on decisions of the Andhra Pradesh, Calcutta and Patna High Courts.
The State opposed the request by relying upon CBIC Circular No. 224/18/2024-GST dated 11 July 2024. It was submitted that the petitioner had neither followed the procedure prescribed in the circular nor acted within the applicable three-month period contemplated under Section 112 of the CGST Act.
Procedure Under CBIC Circular No. 224/18/2024-GST
The High Court examined paragraphs 4, 5 and 6 of the circular, which prescribe a mechanism for taxpayers intending to challenge an appellate authority’s order before the GST Appellate Tribunal.
Under the circular, a taxpayer seeking protection from recovery is required to pay an amount equivalent to the statutory pre-deposit and submit an undertaking or declaration before the jurisdictional proper officer stating that an appeal will be filed before the Tribunal within the prescribed timeline. Upon compliance, recovery of the remaining confirmed demand stands stayed in terms of Section 112(9) of the CGST Act.
Where the taxpayer does not make the required payment or furnish the undertaking, the authorities may presume that the taxpayer does not intend to file an appeal, and recovery proceedings may be initiated in accordance with law.
High Court’s Findings
The Court noted that the petitioner filed the Tribunal appeal nearly seven months after the Order-in-Appeal dated 4 November 2025. By that time, the tax amount had already been recovered.
The petitioner had not followed the procedure prescribed by the CBIC circular for obtaining protection against recovery. The Court rejected the contention that the petitioner was unaware of the circular, observing that ignorance of law is not an excuse.
According to the Court, the petitioner was required to file the appeal within the period prescribed under Section 112 and comply with the pre-deposit and undertaking requirements if it intended to prevent recovery of the confirmed demand.
Refund Would Amount to Waiver of Pre-Deposit
The Court held that directing refund of the amount already recovered would effectively amount to permitting a waiver of the statutory pre-deposit requirement. Such a direction was considered impermissible.
The Court further observed that the GST Appellate Tribunal was competent to examine the issues raised in the appeal. Therefore, the petitioner could pursue the substantive dispute before the Tribunal, but was not entitled to a refund of the amount already recovered.
Earlier High Court Decisions Distinguished
The judgments relied upon by the petitioner were held to be inapplicable because those decisions had not considered the effect of CBIC Circular No. 224/18/2024-GST dated 11 July 2024.
The Gujarat High Court accordingly rejected the writ petition and refused to direct refund of the recovered tax amount.
Significance of the Decision
The ruling highlights that the extension of the deadline for filing appeals before the GST Appellate Tribunal does not automatically entitle a taxpayer to obtain refund of amounts lawfully recovered in the meantime.
A taxpayer seeking protection from recovery must comply with the prescribed procedure, including payment of the applicable pre-deposit and submission of the required undertaking. Filing an appeal at a later stage, after recovery has already taken place, may not by itself provide a basis for refund.
The decision is relevant for taxpayers, advocates, Chartered Accountants and GST practitioners handling appellate orders during the transitional period relating to the operationalisation of the GST Appellate Tribunal.
