Facts of the Case: In this case, the petitioner was issued a notice under Section 61 pointing out discrepancies between ITC claimed in GSTR-3B and ITC reflected in GSTR-2A for FY 2017-18. Subsequent proceedings under Section 73 culminated in a final order dated 31.05.2023, raising a demand of ₹12,58,552 (tax and penalty), followed by a demand notice in Form DRC-07.

The petitioner filed a statutory appeal under Section 107 on 06.08.2025 within the prescribed limitation, depositing 10% of the disputed tax as mandatory pre-deposit under Section 107(6).

Despite pendency of the appeal, the Tehsildar issued a recovery citation dated 05.08.2025 under Section 79(1)(c) for the full demand amount.

Issue: Whether recovery proceedings under Section 79 can be initiated when a statutory appeal under Section 107 has been filed with compliance of the mandatory pre-deposit requirement.

Held That:

The Court noted that the petitioner had filed the statutory appeal within limitation and deposited the mandatory 10% pre-deposit. As per settled law, once such an appeal is filed with pre-deposit, recovery of the balance demand is deemed to be stayed till disposal of the appeal.

Accordingly, initiation of recovery proceedings during pendency of the appeal was held unsustainable in law. The recovery citation dated 05.08.2025 was quashed and set aside.

This ruling reinforces that filing an appeal under Section 107 with 10% pre-deposit automatically stays recovery of the balance demand. Recovery actions under Section 79 during pendency of appeal are without jurisdiction. Further, provides relief to taxpayers facing parallel recovery actions while pursuing appellate remedies.

Case Name: M/s Radha Krishna Versus State Of Uttarakhand and Others dated 18.08.2025

To read the complete judgment 2025 Taxo.online 2159