The Punjab & Haryana High Court addressed a case involving INDCOP Industries Private Limited, which sought the release of goods as per the orders of the Deputy Commissioner (State Tax Appeals). The State of Punjab refused to comply with the appellate order, arguing that it had filed writ petitions challenging the order, as the GST Appellate Tribunal under Section 112 of the CGST Act was not functional at that time. The goods in question were copper scrap being transported from Delhi to Jammu, which the petitioner claimed were not intended for consumption in Punjab.
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The key issue was whether the State could withhold compliance with the First Appellate Authority's order without a stay from a higher forum. The Court ruled that since the GST Appellate Tribunal had been constituted, the State should pursue the statutory appellate remedy under Section 112 of the CGST Act rather than resorting to the High Court's extraordinary writ jurisdiction. The Court emphasized that the appellate order remained valid without a stay or set aside by a higher forum, and the State's intention to challenge it was insufficient to justify non-compliance.
Recognizing the petitioner as an established manufacturing company, the Court deemed it unjust to withhold the benefits of a valid appellate order without an interim stay. To protect both parties' interests, the Court directed the petitioner to provide a bond and local surety to the Assessing Authority, allowing for the goods' release while safeguarding the State's rights should it succeed in future appeals.
Order Date - 08 July 2026
Parties: INDCOP Industries Private Limited v. State of Punjab & Others
Facts -
- Petitione,: INDCOP Industries Private Limited approached the High Court seeking release of its goods in compliance with orders passed by the Deputy Commissioner (State Tax Appeals), which had directed release of the goods in its favour.
- The State refused to release the goods despite the appellate orders, contending that it had challenged those orders before the High Court through connected writ petitions.
- The dispute arose because the statutory GST Appellate Tribunal under Section 112 of the CGST Act was not functional when the State initiated the writ petitions instead of filing a statutory appeal. The goods involved were copper scrap being transported from Delhi to Jammu, and the petitioner argued that they were not meant for consumption within Punjab.
Issue -
- Whether the State can withhold compliance with a First Appellate Authority's order directing release of goods merely because it proposes to challenge that order, despite there being no stay or interim protection from a higher forum.
Order -
- The Court observed that since the GST Appellate Tribunal had now been constituted, the State should avail the statutory appellate remedy under Section 112 of the CGST Act instead of invoking the High Court's extraordinary writ jurisdiction. Questions involving facts and law are better examined by the appellate forum created under the statute.
- The Court held that the appellate order continued to remain valid because no higher forum had stayed or set it aside. Mere intention of the State to challenge the order could not justify withholding compliance with the directions issued by the First Appellate Authority.
- The Court further noted that the petitioner was an established manufacturing company and not a fly-by-night operator. Therefore, denying the benefit of a valid appellate order without any interim stay would be unjust, while the State could still take consequential action if it ultimately succeeded in appeal.
- To balance the interests of both parties, the Court directed the petitioner to furnish a bond along with a local surety before the Assessing Authority. This would safeguard the State's right to recover dues if it later succeeded before the appellate forum, while allowing immediate release of the goods.
