S.107 GST Act | Impugned Order “Automatically Stayed” Once Appeal Is Filed & Pre-Deposit Is Made; No Attachment Of Bank Account: Delhi HC
The Delhi High Court has observed that once an appeal is filed by the assessee under Section 107 of the Central Goods and Services Tax Act 2017 and pre-deposit is made, there is “automatic stay” of the impugned order raising demand.A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta thus interdicted the bank from attaching the account of an assessee, who had preferred...
The Delhi High Court has observed that once an appeal is filed by the assessee under Section 107 of the Central Goods and Services Tax Act 2017 and pre-deposit is made, there is “automatic stay” of the impugned order raising demand.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta thus interdicted the bank from attaching the account of an assessee, who had preferred an appeal against demand. It observed,
“A perusal of Section 107(7) of the Central Goods and Services Tax Act, 2017 and the judgments relied on, would show that once an appeal is filed and pre-deposit is made, there is automatic stay of the impugned order. In view thereof, the attachment of the bank account is not sustainable.”
Petitioner had challenged provisional attachment of its bank account, stating that the order forming the basis of attachment was itself under challenge.
It had relied on M/s Unity Traders v. Principal Additional Director, DGGI & Anr (2025) where the High Court had held that an assessee's business cannot be prejudiced by complete attachment of bank accounts, till the issue relating to evasion is adjudicated.
Reliance was also placed on Radha Krishnan Industries v. State of Himachal Pradesh (2021) where it was held that 10% deposit has to be paid in relation to which the appeal has been filed, upon payment the recovery proceedings for the balance are deemed to be stayed and thus, any order of provisional attachment must cease to subsist.
As such, the Court ordered the bank to de-freeze the current accounts and the FD accounts of the Petitioner with immediate effect and disposed of the plea.
Appearance: Mr. R.P. Singh, Mr. Aman Sinha, Mr. Anant Vijay, Mr. Yash Agarwal, Mr. Rahul Ranjan & Ms. Prashasti, Advs. for Petitioner; Mr. Gibran Naushad, SSC with Mr. Harsh Singhal, Mr. Suraj Shekhar Singh, Advs. for R-1; Ms. Aditi, Advocate for ICICI Bank.
Case title: M/S MJ Bizcrafts LLP Through Partner Rajender Kumar v. Central Goods And Services Tax Delhi South Commissionerate Through Its Commissioner & Ors.
Case no.: W.P.(C) 9061/2025