The Bombay High Court quashed bank attachment notices for ₹22.12 crore of interest, holding that once tax is fully paid, an appeal against interest alone needs no percentage pre-deposit and stays recovery.
The Bombay High Court has held that the percentage pre-deposit under Section 112(8)(b) of the CGST Act does not extend to disputed interest where the entire tax has been paid, so recovery of that interest is deemed stayed under Section 112(9) while the appeal is pending before the Tribunal. [Roadway Solutions India Infra. Ltd. v. State of Maharashtra & Ors., 2026-juristway.com-3156-HC(Bombay)-GST]
A Division Bench of Justice M. S. Karnik and Justice Sandesh D. Patil allowed three writ petitions by a common judgment, written by Justice M. S. Karnik.
The petitioner, a highway contractor, paid its tax late. Interest under Section 50 was confirmed by an order dated 16 Apr 2026, and the first appeal was rejected on 13 Jul 2026. While its appeal was pending before the Tribunal, the Department issued recovery intimations in September 2026 and five notices under Section 79(1)(c) asking banks to pay ₹22,12,15,180.
The State argued that interest on admitted, self-assessed tax paid late is recoverable under Section 75(12) without adjudication, and that an appeal against interest alone is not maintainable under Sections 107(6) and 112(8). The petitioner said it had paid the tax under protest and disputed the interest.
The Bench held that Sections 107(6) and 112(8) require deposit of the admitted amount and a percentage of disputed tax, but say nothing about interest where interest alone is challenged. Both appellate forums had accepted the appeals without any pre-deposit of interest. Recovery despite the deemed stay was “in the teeth of the provisions of Section 112(9)”.
The recovery communications and bank notices were quashed to the extent they covered interest under appeal, and the Department was directed to withdraw the bank notices and lift debit restrictions. The petitioner’s claims of payment under protest and a refund of about ₹80 crore were left open. No costs were awarded.
2026-juristway.com-3156-HC(Bombay)-GST
