The Andhra Pradesh High Court held that, upon deposit of 10% of disputed tax as mandated by Section 107(6) of the APGST Act, GST authorities have no jurisdiction to further restrain, attach, or recover from the assessee during the appeal’s pendency. This judgment reaffirms the statutory order of “deemed stay” and clarifies the limits on recovery actions; it constitutes binding authority for subordinate courts within Andhra Pradesh.
Summary
| Category | Data |
|---|---|
| Case Name | WP/22461/2025 of Wingtech Mobile Communications (India) Pvt. Ltd. Vs Deputy Commissioner (ST) – I, CNR APHC010442312025 |
| Date of Registration | 21-08-2025 |
| Decision Date | 02-09-2025 |
| Disposal Nature | DISPOSED OF NO COSTS |
| Judgment Author | Justice R. Raghunandan Rao |
| Concurring or Dissenting Judges | Justice T.C.D.Sekhar (Concurring) |
| Court | High Court of Andhra Pradesh |
| Bench | Justice R. Raghunandan Rao, Justice T.C.D.Sekhar |
| Precedent Value | Binding on Andhra Pradesh subordinate courts; persuasive for other jurisdictions |
| Type of Law | Tax / GST / Administrative Law |
| Questions of Law | Whether, after payment of the statutory 10% pre-deposit under Section 107(6) APGST Act for appeal, authorities can attach or restrain petitioner’s funds. |
| Ratio Decidendi |
Once a taxpayer deposits 10% of the disputed tax for purposes of filing an appeal per Section 107(6) of the APGST Act, a statutory “deemed stay” against further recovery operates. There exists no provision under the APGST Act that permits further attachment, restraint, or recovery actions by authorities over and above the 10% deposit during pendency of the appeal. The High Court clarified that any such action is ultra vires, arbitrary, and without jurisdiction. The authorities must refund/release excess amounts attached or recovered, subject to appropriate undertakings by the taxpayer to retain funds during the appeal pendency. |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Interpretation of Section 107(6) and Section 79, 83 of APGST Act; analysis of “deemed stay” operative upon pre-deposit. |
| Facts as Summarised by the Court |
Recovery and attachment of accounts were initiated before expiry of 90 days post-assessment and before the taxpayer could make the requisite pre-deposit for appeal due to funds being attached/recovered. The taxpayer sought refund/release of excess recovered amounts, disputing statutory authority for continuing restraint after 10% deposit. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts and authorities within Andhra Pradesh |
| Persuasive For | High Courts of other States; possible persuasive value for Supreme Court |
What’s New / What Lawyers Should Note
- The judgment makes explicit that once a statutory pre-deposit (10% of disputed tax) is paid for an appeal under Section 107(6) of the APGST Act, a “deemed stay” against further recovery attaches automatically.
- Authorities have no jurisdiction to continue attachment, impose new restraints, or realise additional amounts from the taxpayer after the 10% pre-deposit during appeal.
- Any recovery or attachment in excess of the 10% pre-deposit during pendency of appeal is ultra vires and must be refunded/released, subject to proper undertakings safeguarding the revenue’s interest.
- Practical mechanism established: taxpayers may give appropriate undertakings to maintain funds in their accounts until appellate proceedings conclude.
- Lawyers can cite this judgment where GST authorities seek recovery of amounts beyond the pre-deposit threshold, impeding the appellate process.
Summary of Legal Reasoning
- The Court emphasized that Section 107(6) of the APGST Act mandates a pre-deposit of 10% of disputed tax for an appeal; upon such deposit, a “deemed stay” is in operation against further recovery of disputed tax.
- The Court analysed the lack of statutory provisions allowing authorities to act further against the taxpayer (by attaching or restraining funds) once the 10% pre-deposit has been made.
- The condition imposed by the authorities to maintain a much higher balance (Rs. 130 crores) after already recovering Rs. 170 crores was held unjustified, given the statutory framework.
- The petitioner’s willingness to give undertakings to retain refunded proceeds in its bank account till appeal disposal further safeguarded the revenue.
- The authorities were directed to refund amounts recovered in excess of the 10% pre-deposit upon such undertakings being filed.
- The decision clarifies that the appellate mechanism must not be frustrated by premature or excessive recovery during appeal.
Arguments by the Parties
Petitioner
- Asserted that, in law, further restraint, attachment, or realisation beyond 10% pre-deposit during appeal pendency is impermissible under Section 107(6).
- Challenged the jurisdiction and propriety of imposing a minimum balance condition when more than 10% had already been recovered.
- Cited statutory “deemed stay” provision post 10% deposit.
- Offered undertakings to retain any refunded amounts and sale proceeds in its accounts to safeguard revenue interests.
Respondent (Tax Authorities)
- Contended that no such undertakings had been submitted, and thus they could not permit the refund of the attached/recovered funds.
- Sought to justify continued restraint/attachment to secure the disputed tax amount.
Factual Background
The petitioner, an industrial taxpayer, had its bank account provisionally attached and funds recovered by GST authorities quickly following the GST assessment order, with Rs. 170 crores realised from its account even before the expiry of the 90-day appeal period. The actions precluded the taxpayer from making the pre-deposit (10% of disputed tax = Rs. 24.46 crores) needed to file an appeal. The taxpayer challenged the premature recovery and requested refund of sums over and above the pre-deposit requirement, subject to undertakings to retain the refunds and not dissipate funds during the appeal process.
Statutory Analysis
- Section 107(6), APGST Act: Requires payment of 10% of disputed tax as pre-deposit for admission of appeal and triggers a deemed stay on recovery for the balance disputed tax during pendency of appeal.
- Section 79(1)(c), APGST Act: Enables recovery proceedings, but the power is circumscribed by the appellate mechanism and the ‘deemed stay’ that follows pre-deposit.
- Section 83, APGST Act: Permits provisional attachment but is subject to restrictions arising from the appellate process, notably the statutory stay under Section 107(6).
- The Court found no statutory authority for further restraint or recovery once the 10% pre-deposit was made and appeal admitted.
Dissenting / Concurring Opinion Summary
Both judges (R. Raghunandan Rao, T.C.D.Sekhar) concurred; no dissenting opinion recorded.
Procedural Innovations
- Established a judicial protocol: upon taxpayer furnishing suitable undertakings to retain funds in its account, authorities are directed to refund amounts recovered in excess of the statutory pre-deposit during the pendency of the appeal.
Alert Indicators
- ✔ Precedent Followed – The judgment affirms statutory “deemed stay” principles and existing appellate relief structures under GST law.