The Uttarakhand High Court has ruled that the tax department cannot recover GST dues if a taxpayer has filed a statutory appeal within the prescribed time and deposited 10 percent of the disputed tax amount. The court quashed a recovery order issued against a firm despite compliance with appeal provisions.
The case involved M/s Radha Krishna Firm, where a dispute arose over ITC discrepancies in its 2017–18 GST return. The department demanded ₹12.58 lakh, including tax and penalty. The firm filed an appeal on August 6, 2025, and deposited 10 percent of the disputed tax, but the Tehsildar had already issued a recovery certificate on August 5, 2025. Challenging this, the firm approached the High Court.
A bench of Chief Justice G. Narendra and Justice Alok Mehra held that Section 107(6) of the CGST Act clearly provides for an automatic stay on recovery of the remaining demand during the pendency of an appeal. The court said the department’s recovery action was not legally sustainable. It clarified that rights and liabilities of the parties will be determined only after the final decision in the appeal and directed the department to act cautiously in future.
