CBIC's 2024 Policy Barring Govt Appeals Below ₹2 Crore Covers Pending Cases, Not Merely Future Filings: Supreme Court

Holding that the Centre's 2024 litigation policy applies even to pending appeals, the Supreme Court on February 5, 2026 dismissed appeals filed by the Commissioner of Commercial Tax against Vikaram Cement, ruling that the Rs. 25.47 lakh tax demand involved fell well below the Rs. 2 crore monetary limit fixed under the June 26, 2024 circular issued by the Central Board of Indirect Taxes and Customs.

Rejecting the State's contention that the circular would not apply to appeals already filed under the repealed Madhya Pradesh General Sales Tax Act, 1958, a Bench of Justices Aravind Kumar and Prasanna B. Varale observed:

“A plain reading of the above condition of the circular would make it explicitly clear that even in respect of pending appeals relating to CGST, SGST/UTGST, IGST and Compensation Cess, the monetary limit fixed would be applicable.”

The top court further rejected the argument that the bar would operate only prospectively, stating:

“Though learned senior counsel appearing for the appellants would contend that it is not only in respect of filing of the appeal in future such bar would be attracted is an argument which is flawed as could be seen from the very Circular itself, which clearly indicate that the National Litigation Policy mandates that expression used therein is 'Appeal should not be pursued' which also means pending appeals.”

Although the underlying dispute arose under the Madhya Pradesh General Sales Tax Act, the court relied on the language of the 2024 CBIC circular, issued pursuant to GST Council recommendations, to determine whether the monetary limits would apply to pending appeals.

The Bench noted that the tax component involved in the present appeals was Rs.25,47,448, whereas the monetary limit fixed for appeals before the Supreme Court under the circular is Rs 2 Crore.

The dispute arose from reassessment proceedings initiated under Section 19(1) of the Madhya Pradesh General Sales Tax Act, 1958, which empowers the authorities to reopen completed assessments, in relation to the assessment year 1987–88. The assessee had originally been assessed for the period April 1, 1987 to March 31, 1988.

After the appellate authority set aside an earlier order and remanded the matter, a fresh assessment was passed in October 1994.

Subsequently, on March 26, 1997, a notice for reassessment was issued. An order dated December 26, 1998, raised a demand of Rs. 25,47,448. The reassessment was challenged on the ground that it was barred by limitation.

A Full Bench of the Madhya Pradesh High Court allowed the writ petition and quashed the reassessment proceedings as time barred. Aggrieved by that ruling, the Commissioner of Commercial Tax approached the Supreme Court.

Dismissing the appeals on the ground of the monetary bar contained in the 2024 circular, the court clarified that it had not expressed any opinion on the question of law involved and kept it open to be urged in an appropriate case.

For Appellant/Department: Additional Advocate General Manisha T Karia; Advocates Deepin Deepak Sahni, Shreya Gupta, Ananya Arora, Vishal Navale, Varun Khetwani, Arkaj Kumar, Shashwat Parihar, Arkaj Kumar Ga; Advocate-on-Record Mrinal Gopal Elker; Advocate-on-Record Harmeet Singh Ruprah.

For Respondent: Advocate-on-Record Khaitan & Co.; Advocates Vanita Bhargava, Ajay Bhargava, Abhay Agnihotri, Tijil Thakur.