Initiation of recovery proceedings
Commencement. 22nd June, 2017 for sections 1, 2, 3, 4, 5, 10, 22, 23, 24, 25, 26, 27, 28, 29, 30, 139, 146 and 164 1st July, 2017 for sections 6 to 9, 11 to 21, 31 to 41, 42 (except proviso to sub-section (9) of S 42), 43 (except proviso to subsection (9) of S 43), 44 to 50, 53 to 138, 140 to 163, 165 to 174.
Section 78 of the Central Goods and Services Tax Act, 2017 deals with initiation of recovery proceedings. Any amount payable by a taxable person in pursuance of an order passed under this Act shall be paid by such person within a period of three months from the date of service of such order failing which recovery proceedings shall be initiated: Provided that where the proper officer considers it expedie The Act was enacted on 12 Apr 2017.
Any amount payable by a taxable person in pursuance of an order passed under this Act shall be paid by such person within a period of three months from the date of service of such order failing which recovery proceedings shall be initiated:
Provided that where the proper officer considers it expedient in the interest of revenue, he may, for reasons to be recorded in writing, require the said taxable person to make such payment within such period less than a period of three months as may be specified by him.
Section 78, The Central Goods and Services Tax Act, 2017 (Act 12 of 2017).
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Ascend Telecom Infrastructure Pvt. Ltd. v. The State of Bihar
Court's Decision & Legal Precedent
DATE VERIFIED Final Order 25.01.2024 (order-1.pdf): Following Sita Pandey/National Insurance, DB ordered refund of amounts recovered after first appeal despite 20% deposit and Removal-of-Difficulty extension of GSTAT limitation; no recovery until Tribunal constituted and appeal period runs; Rs.5,000 personal costs on the officer for callous s.78/proviso overreach.
On this section: s.78 recovery cannot override extended GSTAT limitation and statutory stay mechanics once 20% is deposited pending Tribunal constitution.
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National Insurance Co. Ltd. v. The State of Bihar
Court's Decision & Legal Precedent
DATE VERIFIED Final Order 15.01.2024 (order-1.pdf): Companion to Sita Pandey — DB condemned recovery despite 20% paid toward unconstituted Tribunal appeal; applied s.78 proviso notice/reasons requirements and imposed personal costs for high-handed bank recovery.
On this section: s.78 proviso does not authorise recovery that frustrates the statutory appeal/stay scheme while GSTAT is unconstituted after 20% payment.
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Sita Pandey v. The State of Bihar
Court's Decision & Legal Precedent
DATE VERIFIED Final Order 23.08.2023 (order-1.pdf): DB held s.78’s three-month payment window controls initiation of recovery; proviso recovery in a shorter period requires reasons recorded in writing, notice/intimation to the assessee specifying the lesser period, and cannot be a surreptitious bank grab—especially while GSTAT is unconstituted; issued recovery guidelines and ordered refund/costs.
On this section: s.78 initiation of recovery: default three months; proviso expedited recovery needs informed reasons + specified lesser period + natural justice; bank attachment before notice is high-handed.
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Alkem Laboratories Limited v. Union of India
Court's Decision & Legal Precedent
DATE VERIFIED Final Order 04.02.2021 (order-3.pdf): DB held s.78 bars recovery before expiry of three months from service of the order; factory attachment/DRC-16 within about one month violated that bar (and order was also quashed for denial of s.75(4) hearing — 75 already covered, not re-mapped). Demand order and attachment set aside; remand for fresh hearing.
On this section: s.78 three-month waiting period before initiation of recovery is mandatory absent a valid proviso shortening; premature attachment falls.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Made under this section, and citing it
2 instruments name this provision in its title or its text without being made under it.
Questions about Section 78
What have the courts held on Section 78 of the Central Goods and Services Tax Act?
Ascend Telecom Infrastructure Pvt. Ltd. v. The State of Bihar (25 Jan 2024) is the leading judgment on this section among those set out below: s.78 recovery cannot override extended GSTAT limitation and statutory stay mechanics once 20% is deposited pending Tribunal constitution. Another 3 judgments on this section are set out below. They run from 2021 to 2024.
How do I find court cases under Section 78 of the Central Goods and Services Tax Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: CGST Act 78, section 78 CGST Act, section 78 of the Central Goods and Services Tax Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 4 reported judgments on this section are set out on this page, beginning with Ascend Telecom Infrastructure Pvt. Ltd. v. The State of Bihar (25 Jan 2024).
What should I read with Section 78 of the Central Goods and Services Tax Act, and has it changed?
2 instruments name it without being made under it, most recently Circular No. 117/36/2019-GST dated 11.10.2019 (2019), then Circular No. 129/48/2019-GST dated 24.12.2019 (2019).
When was Section 78 of the Central Goods and Services Tax Act enacted?
Section 78 of the Central Goods and Services Tax Act, cited as CGST Act 78, was enacted on 12 Apr 2017 as Act 12 of 2017. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions5109 words
- 142. Miscellaneous transitional provisions1966 words
- 140. Transitional arrangements for input tax credit1883 words
- 54. Refund of tax1858 words
- 110. President and Members of Appellate Tribunal, their qualification, appointment, conditions of service, etc1647 words
- 74A. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason pertaining to Financial Year 2024-25 onward1299 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.