[Cites 21, Cited by 0]
Bombay High Court
The Hongkong And Shanghai Banking ... vs State Of Maharashtra Through The ... on 20 February, 2026
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
Digitally
signed by
2026:BHC-OS:5320-DB
VILAS
RANE
PRASHANT
PRASHANT VILAS RANE
Date:
2026.02.26
418-WPL-4698-26.DOC
21:44:41
+0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO.4698 OF 2026
The Hongkong and Shanghai Banking
Corporation Ltd ...Petitioner
Versus
State of Maharashtra through the
Secretary to the Government Revenue
Dept & Ors. ...Respondents
_______
Mr. Prasad Paranjape (Through V.C.) a/w. Bhavya Varma a/w. Mr. Kevin Gogri,
i/b. Lumiere Law Partners, for Petitioner.
Mr. Himanshu Takke, AGP for Respondent- State.
_______
CORAM: G. S. KULKARNI &
AARTI SATHE, JJ.
DATE: 20 FEBRUARY 2026
Oral Judgment: (Per G. S. Kulkarni, J.)
1. This petition under Article 226 of the Constitution raises an interesting
issue as to whether the Goods and Services Tax Appellate Tribunal ('the Tribunal'),
in its constitution under the Central Goods and Services Tax Act, 2017(CGST
Act), has jurisdiction to pass interim orders.
2. An Order-in-Original was passed under the provisions of the CGST Act
against the petitioner on 18th December 2023 whereunder a tax liability stands
confirmed against the petitioner. The Petitioner preferred an Appeal before the
Appellate Authority. By an Order dated 12th June 2024, the Appellate Authority
rejected the Petitioner's Appeal by passing an Order-in-Appeal.
Mane
418-WPL-4698-26.DOC
3. The Petitioner thereafter filed an Appeal before the GST Tribunal against
the said Order-in-Appeal on 5th February 2026. In the interregnum, the Petitioner
received intimations by e-mails dated 3rd February 2026 and 6th February 2026
raising a demand. Upon receipt of such intimations, the Petitioner informed
Respondent No. 3 that the demand amount has been deposited and adjusted
through Form GST DRC-03A, and that an Appeal against the Order-in-Appeal is
pending before the Tribunal.
4. It is the petitioner's contention that notwithstanding the above position, a
Recovery Notice dated 6th February 2026 has been issued to the Petitioner and
steps are sought to be taken to implement the same. It is in these circumstances,
the present Petition has been filed contending that although the petitioner's appeal
is pending before the Tribunal, coercive recovery proceedings ought not to be
continued. The Petition, therefore, seeks the following substantive reliefs:
a) Your Lordships be pleased to issue a Writ of Certiorari any other
appropriate writ, order or direction under Article 226/ 227 of the
Constitution of India, quashing and setting aside the Impugned
Intimation Notice dated 03.02.2026 and the Impugned Recovery
Notice dated 06.02.2026 for being arbitrary, without the authority of
law, in excess / without jurisdiction, and in contravention of the
Section 112(9) and/or Section 75(12) of the CGST Act;
b) Pending hearing and final disposal of this Writ Petition, by an
interim order and injunction, stay the operation and effect of the
Impugned Intimation Notice dated 03.02.2026 and the Impugned
Recovery Notice dated 06.02.2026;
5. At the outset, Mr. Takke, learned counsel appearing for the Revenue,
submitted that once the Appeal is pending before the Tribunal, the Petitioner
ought to have approached the Tribunal seeking appropriate interim reliefs. He
submitted that the Petitioner has an efficacious alternative remedy of moving the
Mane
418-WPL-4698-26.DOC
Tribunal for grant of stay, including on the basis of its contention under Section
112(9) of the Central Goods and Services Tax Act, 2017(CGST Act), namely, that
upon payment of the amount in terms of sub-section (8) of Section 112, recovery
proceedings for the balance amount shall be deemed to be stayed till the disposal of
the Appeal.
6. Responding to the objections as raised on behalf of the Revenue, learned
counsel for the Petitioner submitted that there is no provision either under the
CGST Act or the Rules framed thereunder empowering the Tribunal to grant an
interim order staying recovery proceedings. It was therefore contended that the
Petitioner had no efficacious alternative remedy and was constrained to approach
this Court under Article 226 of the Constitution of India.
7. In the aforesaid circumstances, the issue which arises for consideration, is
whether the Tribunal as constituted under Sections of CGST Act is empowered to
pass interim orders. With the assistance of the learned counsel for the parties,
perused the relevant statutory provisions. Chapter XVIII of the CGST Act provides
for Appeals and Revisions. Section 109 deals with the constitution of the Appellate
Tribunal. Section 111 provides for the procedure before the Appellate Tribunal.
Section 112 provides for Appeals to the Appellate Tribunal. Section 113 provides
for orders of the Appellate Tribunal. The said provisions are required to be noted
and read as under:
111. Procedure before Appellate Tribunal.-- (1) The Appellate Tribunal
shall not, while disposing of any proceedings before it or an appeal before
it, be bound by the procedure laid down in the Code of Civil Procedure,
1908, but shall be guided by the principles of natural justice and subject
Mane
418-WPL-4698-26.DOC
to the other provisions of this Act and the rules made thereunder, the
Appellate Tribunal shall have power to regulate its own procedure.
(2) The Appellate Tribunal shall, for the purposes of discharging its
functions under this Act, have the same powers as are vested in a civil
court under the Code of Civil Procedure, 1908 while trying a suit in
respect of the following matters, namely:--
(a) summoning and enforcing the attendance of any person and
examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) subject to the provisions of sections 123 and 124 of the Indian
Evidence Act, 1872, requisitioning any public record or document or a
copy of such record or document from any office;
(e) issuing commissions for the examination of witnesses or documents;
(f) dismissing a representation for default or deciding it ex parte;
(g) setting aside any order of dismissal of any representation for default or
any order passed by it ex parte; and
(h) any other matter which may be prescribed.
(3) Any order made by the Appellate Tribunal may be enforced by it in
the same manner as if it were a decree made by a court in a suit pending
therein, and it shall be lawful for the Appellate Tribunal to send for
execution of its orders to the court within the local limits of whose
jurisdiction,--
(a) in the case of an order against a company, the registered office of the
company is situated; or
(b) in the case of an order against any other person, the person concerned
voluntarily resides or carries on business or personally works for gain.
(4) All proceedings before the Appellate Tribunal shall be deemed to be
judicial proceedings within the meaning of sections 193 and 228, and for
the purposes of section 196 of the Indian Penal Code, and the Appellate
Tribunal shall be deemed to be civil court for the purposes of section 195
and Chapter XXVI of the Code of Criminal Procedure, 1973.
Section 112. Appeals to Appellate Tribunal.-*
(1) Any person aggrieved by an order passed against him under section
107 or section 108 of this Act or the State Goods and Services Tax Act or
the Union Territory Goods and Services Tax Act may appeal to the
Appellate Tribunal against such order within three months from the date
on which the order sought to be appealed against is communicated to the
person preferring the appeal; or the date, as may be notified by the
Government, on the recommendations of the Council, for filing appeal
before the Appellate Tribunal under this Act, whichever is later.
(2) The Appellate Tribunal may, in its discretion, refuse to admit any
such appeal where the tax or input tax credit involved or the difference in
Mane
418-WPL-4698-26.DOC
tax or input tax credit involved or the amount of fine, fee or penalty
determined by such order, does not exceed fifty thousand rupees.
(3) The Commissioner may, on his own motion, or upon request from
the Commissioner of State tax or Commissioner of Union territory tax,
call for and examine the record of any order passed by the Appellate
Authority or the Revisional Authority under this Act or the State Goods
and Services Tax Act or the Union Territory Goods and Services Tax Act
for the purpose of satisfying himself as to the legality or propriety of the
said order and may, by order, direct any officer subordinate to him to
apply to the Appellate Tribunal within six months from the date on
which the said order has been passed; or the date, as may be notified by
the Government, on the recommendations of the Council, for the
purpose of filing application before the Appellate Tribunal under this
Act, whichever is later, for determination of such points arising out of the
said order as may be specified by the Commissioner in his order.
(4) Where in pursuance of an order under sub-section (3) the authorised
officer makes an application to the Appellate Tribunal, such application
shall be dealt with by the Appellate Tribunal as if it were an appeal made
against the order under sub-section (11) of section 107 or under sub-
section (1) of section 108 and the provisions of this Act shall apply to
such application, as they apply in relation to appeals filed under sub-
section (1).
(5) On receipt of notice that an appeal has been preferred under this
section, the party against whom the appeal has been preferred may,
notwithstanding that he may not have appealed against such order or any
part thereof, file, within forty-five days of the receipt of notice, a
memorandum of cross-objections, verified in the prescribed manner,
against any part of the order appealed against and such memorandum
shall be disposed of by the Appellate Tribunal, as if it were an appeal
presented within the time specified in sub-section (1).
(6) The Appellate Tribunal may admit an appeal within three months
after the expiry of the period referred to in sub-section (1) or permit the
filing of an application within three months after the expiry of the period
referred to in sub-section (3), or permit the filing of a memorandum of
cross-objections within forty-five days after the expiry of the period
referred to in sub-section (5) if it is satisfied that there was sufficient
cause for not presenting it within that period.
(7) An appeal to the Appellate Tribunal shall be in such form, verified in
such manner and shall be accompanied by such fee, as may be prescribed.
(8) No appeal shall be filed under sub-section (1), unless the appellant
has paid-
(a) in full, such part of the amount of tax, interest, fine, fee and penalty
arising from the impugned order, as is admitted by him, and
Mane
418-WPL-4698-26.DOC
(b) a sum equal to ten per cent. of the remaining amount of tax in
dispute, in addition to the amount paid under sub-section (6) of section
107, arising from the said order, subject to a maximum of 5[twenty crore
rupees, in relation to which the appeal has been filed.
[Provided that in case of any order demanding penalty without involving
demand of any tax, no appeal shall be filed against such order unless a
sum equal to ten percent of the said penalty, in addition to the amount
payable under the proviso to sub-section (6) of section 107 has been paid
by the appellant.]
(9) Where the appellant has paid the amount as per sub-section (8), the
recovery proceedings for the balance amount shall be deemed to be
stayed till the disposal of the appeal.
(10) Every application made before the Appellate Tribunal,-
(a) in an appeal for rectification of error or for any other purpose; or
(b) for restoration of an appeal or an application,
shall be accompanied by such fees as may be prescribed.
113. Orders of Appellate Tribunal.-- (1) The Appellate Tribunal may,
after giving the parties to the appeal an opportunity of being heard, pass
such orders thereon a sit thinks fit, confirming, modifying or annulling
the decision or order appealed against or may refer the case back to the
Appellate Authority, or the Revisional Authority or to the original
adjudicating authority, with such directions as it may think fit, for a fresh
adjudication or decision after taking additional evidence, if necessary.
(2) The Appellate Tribunal may, if sufficient cause is shown, at any stage
of hearing of an appeal, grant time to the parties or any of them and
adjourn the hearing of the appeal for reasons to be recorded in writing:
Provided that no such adjournment shall be granted more than three
times to a party during hearing of the appeal.
(3) The Appellate Tribunal may amend any order passed by it under sub-
section (1) so as to rectify any error apparent on the face of the record, if
such error is noticed by it on its own accord, or is brought to its notice by
the Commissioner or the Commissioner of State tax or the
Commissioner of the Union territory tax or the other party to the appeal
within a period of three months from the date of the order:
Provided that no amendment which has the effect of enhancing an
assessment or reducing a refund or input tax credit or otherwise
increasing the liability of the other party, shall be made under this sub-
section, unless the party has been given an opportunity of being heard.
Mane
418-WPL-4698-26.DOC
(4) The Appellate Tribunal shall, as far as possible, hear and decide every
appeal within a period of one year from the date on which it is filed.
(5) The Appellate Tribunal shall send a copy of every order passed under
this section to the Appellate Authority or the Revisional Authority, or the
original adjudicating authority, as the case may be, the appellant and the
jurisdictional Commissioner or the Commissioner of State tax or the
Union territory tax.
(6) Save as provided in section 117 or section 118, orders passed by the
Appellate Tribunal on an appeal shall be final and binding on the parties.
8. In our opinion, the aforesaid provisions are required to be read conjointly.
Sub-section (1) of Section 111 provides that the Appellate Tribunal, while
disposing of any proceedings or an Appeal before it, shall be bound by the
procedure laid down in the Code of Civil Procedure, 1908, but shall be guided by
the principles of natural justice and, subject to the other provisions of the Act and
the Rules framed thereunder, shall have the power to regulate its own procedure.
Sub-section (2) of Section 111 provides that the Appellate Tribunal shall, for the
purpose of discharging its functions under the Act, have the same powers as are
vested in a Civil Court under the Code of Civil Procedure, 1908 while trying a suit,
in respect of matters specified in clauses (a) to (h) therein. Sub-section (3) provides
that any order made by the Appellate Tribunal may be enforced by it in the same
manner as if it were a decree made by a Court in a suit pending therein, and it shall
be lawful for the Appellate Tribunal to transmit its order for execution to the Court
within the local limits of whose jurisdiction the subject matter is situated, as
contemplated under clauses (a) and (b). Sub-section (4) provides that all
proceedings before the Appellate Tribunal shall be deemed to be judicial
Mane
418-WPL-4698-26.DOC
proceedings within the meaning of Sections 193 and 228 of CGST Act and for the
purposes of Section 196 of the Indian Penal Code, 1860 and that the Appellate
Tribunal shall be deemed to be a Civil Court for the said purposes.
9. We now advert to the most relevant provision i.e., Section 113, which deals
with the orders to be passed by the Appellate Tribunal. Sub-section (1) of Section
113 provides that the Appellate Tribunal may, after giving the parties to the Appeal
an opportunity of being heard, pass such orders thereon as it thinks fit, confirming,
modifying or annulling the decision or order appealed against, or may refer the case
back to the Appellate Authority, the Revisional Authority or the original
Adjudicating Authority with such directions as it may think fit for a fresh
adjudication or decision, including after taking additional evidence, if necessary.
Sub-section (2) of Section 113 provides that the Appellate Tribunal may, if
sufficient cause is shown at any stage of the hearing of an Appeal, grant time to the
parties and adjourn the hearing of the Appeal for reasons to be recorded in writing.
10. Considering the nature of the powers conferred under sub-section (1) of
Section 113 to pass such orders "as it thinks fit", in our opinion, it cannot be
inferred, that although the Tribunal is vested with the jurisdiction to pass
substantive final orders on the Appeal to confirm, modify or annul the decision or
order appealed against, or may refer the case back to the Appellate Authority or the
Revisional Adjudicating Authority with appropriate directions as it may think fit,
for a fresh adjudication or decision in the manner as provided in sub-section (1) of
Section 113, it would nonetheless lack jurisdiction to pass appropriate interim
orders. The power to grant interim relief, including protection against recovery
Mane
418-WPL-4698-26.DOC
pending the Appeal, is inherent and incidental to the appellate jurisdiction
conferred upon the Tribunal. Thus, the appellate power of the Tribunal being wide
in its sweep, necessarily wields with the appellate tribunal, the authority and
jurisdiction to pass appropriate interim orders relevant to subject matter of the
appeal, so as to make the appellate remedy effective.
11. Also, on first principles, we are unable to accept a proposition that although
the Appellate Tribunal is a statutory forum created under the scheme of Sections
111, 112 and 113 of the CGST Act, 2017, it would nevertheless be powerless to
grant interim relief. Such an interpretation would render the appellate remedy
illusory and defeat the legislative intent, cumulatively and wholesomely gathered
from the provisions as noted hereinabove, surrounding the constitution of the
Appellate Tribunal.
12. The consequence of what is urged on behalf of the petitioner is to the effect
that although the Appellate Tribunal would have powers to set aside the order
impugned before it, the interim relief authority would be vested with the High
Court in the proceedings under Article 226 of the Constitution. This can never be
the legislative intent, that the High Court should function as a forum for grant of
interim relief, in matters squarely falling within the appellate jurisdiction of the
Tribunal. This is inconceivable.
13. When we have reached the aforesaid conclusion, although not referred at
the bar, our anxiety of a deeper scrutiny led us to lay our hands on the Notification
dated 24 April 2025 issued by the Ministry of Finance, Department of Revenue
notifying the "Goods and Services Tax Appellate Tribunal (Procedure) Rules,
Mane
418-WPL-4698-26.DOC
2025", under which the following Rules would make the position crystal clear,
insofar as the powers of the Tribunal in passing interim orders are concerned:
"10. Inherent powers. - Nothing in these rules shall be deemed to limit or
otherwise affect the inherent powers of the Appellate Tribunal to make such
orders or give such directions as may be necessary for meeting the ends of justice
or to prevent abuse of the process of the Appellate Tribunal.
29. Interlocutory applications. - Every interlocutory application for stay,
direction, rectification in order, condonation of delay, early hearing, exemption
from production of copy of order appealed against or extension of time prayed
for in pending matters shall include all the information as per the prescribed
GSTAT FORM-01 and the requirements prescribed in that behalf shall be
complied with by the applicant, besides filing an affidavit supporting the
application."
49. Procedure for filing of and disposal of interlocutory application. -- The
provisions of the rules regarding the filing of interlocutory applications shall, in
so far as may be, apply mutatis mutandis to the filing of applications under this
rule.
59. Registers to be maintained. --The following Registers shall be maintained
online/offline and posted on a day-to-day basis by such ministerial officer or
officer of the Registry may, subject to any order of the President -
...
(c) register of interlocutory applications (GSTAT-CDR -05).
(emphasis supplied)
14. In a context quite similar in Income Tax Officer, Cannanore vs. M. K.
Mohammed Kunhi1, the Supreme Court was dealing with the question, as to
whether the Income Tax Appellate Tribunal had the power, under the provisions of
the Income Tax Act, 1961 to stay the recovery of the realization of the penalty
imposed by the departmental authorities on an assessee during the pendency of an
appeal filed before it. In such context, the Supreme Court, interpreting Section 254
of the Income Tax Act being a provision quite similar to Section 113 of the CGST
Act, held that although there was no express provision conferring upon the
Appellate Tribunal the power to stay recovery of tax or penalty during the
pendency of an appeal, such power must be regarded as incidental and necessary to
1 1968 SCC OnLine SC 71
Mane
418-WPL-4698-26.DOC
its appellate jurisdiction. The Supreme Court held that when Section 254(1)
confers wide appellate powers upon the Tribunal to pass such orders "as it thinks
fit," it impliedly grants all powers necessary to make the exercise of such appellate
jurisdiction effective. The relevant observations of the court read thus:
"6. There can be no manner of doubt that by the provisions of the Act or the
Income Tax Appellate Tribunal Rules, 1963 powers have not been expressly
conferred upon the Appellate Tribunal to stay proceedings relating to the
recovery of penalty or tax due from an assessee. At the same time it is significant
that under Section 220(6) the power of stay by treating the assessee as not being
in default during the pendency of an appeal has been given to the Income Tax
Officer only when an appeal has been presented under Section 246 which will be
to the Appellate Assistant Commissioner and not to the Appellate Tribunal.
There is no provision in Section 220 under which the Income Tax Officer or any
of his superior departmental officers can be moved for granting stay in the
recovery of penalty or tax. It may be that under Section 225 notwithstanding that
a certificate has been issued to the Tax Recovery Officer for the recovery of any
tax (the position will be the same with regard to penalty) the Income Tax Officer
may grant time for the payment of the tax. In this manner he can probably keep
on granting extensions until the disposal of the appeal by the Tribunal. It may
also be that as a matter of practice prevailing in the department the
Commissioner or the Inspecting Assistant Commissioner in exercise of
administrative powers ers can give the necessary relief of staying recovery to the
assessee but that can hardly be put at par with a statutory power as is contained in
Section 220(6) which is confined only to the stage of pendency of an appeal
before the Appellate Assistant Commissioner. The argument advanced on behalf
of the appellant before us that in the absence of any express provisions in Sections
254 and 255 of the Act relating to stay of recovery during the pendency of an
appeal it must be held that no such power can be exercised by the Tribunal,
suffers from a fundamental infirmity inasmuch as it assumes and proceeds on the
premise that the statute confers such a power on the Income Tax Officer who can
give the necessary relief to an assessee. The right of appeal is a substantive right
and the questions of fact and law are at large and are open to review by the
Appellate Tribunal. Indeed the Tribunal has been given very wide powers under
Section 254(1) for it may pass such orders as it thinks fit after giving full hearing
to both the parties to the appeal. If the Income Tax Officer and the Appellate
Assistant Commissioner have made assessments or imposed penalties raising very
large demands and if the Appellate Tribunal is entirely helpless in the matter of
stay of recovery the entire purpose of the appeal can be defeated if ultimately the
orders of the departmental authorities are set aside. It is difficult to conceive that
the legislature should have left the entire matter to the administrative authorities
to make such orders as they choose to pass in exercise of unfettered discretion.
The assessee, as has been pointed out before, has no right to even move an
application when an appeal is pending before the Appellate Tribunal under
Section 220(6) and it is only at the earlier stage of appeal before the Appellate
Assistant Commissioner that the statute provides for such a matter being dealt
with by the Income Tax Officer. It is a firmly established rule that an express
grant of statutory power carries with it by necessary implication the authority to
use all reasonable means to make such grant effective (Sutherland Statutory
Construction, 3rd Edn., Articles 5401 and 5402). The powers which have been
Mane
418-WPL-4698-26.DOC
conferred by Section 254 on the Appellate Tribunal with widest possible
amplitude must carry with them by necessary implication all powers and duties
incidental and necessary to make the exercise of those powers fully effective. In
Domat's Civil Law Cushing's Edn., Vol. 1 at p. 88, it has been stated:
"It is the duty of the Judges to apply the laws, not only to what appears
to be regulated by their express dispositions, but to all the cases where
a just application of them may be made, and which appear to be
comprehended either within the consequences that may be gathered
from it."
(emphasis supplied)
15. In the light of the aforesaid discussion and considering the powers
conferred upon the Tribunal under the statutory scheme, we are not inclined to
accept the Petitioner's contention that the Tribunal lacks jurisdiction to grant
interim reliefs of the nature sought. Consequently, we are of the opinion that the
Petitioner ought to move an appropriate interim application before the Appellate
Tribunal and invite appropriate orders in the pending Appeal.
16. Considering that the Petitioner has approached this Court urgently in view
of the Recovery Notice dated 6th February 2026, we deem it appropriate and in
the interests of justice, to grant limited interim protection to the petitioner, so as to
enable the Petitioner to approach the Appellate Tribunal. Accordingly, the
Petitioner is at liberty to file an interim application before the Appellate Tribunal
within a period of two weeks from today. Till such interim application is filed and
decided by the Tribunal, the Recovery Notice dated 6th February 2026 shall not
be acted upon by the Respondents.
17. At this stage, we are informed that the electronic portal does not provide for
filing of an interim application. If that be so, we permit the Petitioner to file the
interim application manually. We also direct that the Registry of the Tribunal
Mane
418-WPL-4698-26.DOC
makes an appropriate provision on the portal to enable filing of such interim
applications.
18. It is clarified that the limited protection granted herein is confined merely to
enable the Petitioner to approach the Tribunal, and is in no manner, an expression
on the merits of the rival contentions. All contentions of the parties in the Appeal
proceedings are expressly kept open for consideration by the Tribunal.
19. The Petition is disposed of in the aforesaid terms. No order as to costs.
(AARTI SATHE, J.) (G. S. KULKARNI, J.)
Mane
