Hyderabad, July 30, 2026: The Telangana High Court has held that the CESTAT cannot constitute a Larger Bench to reconsider or examine the correctness of a binding judgment of the jurisdictional High Court unless that judgment has been stayed, reversed or overruled by the Supreme Court.

The ruling came in Autoform Engineering India Pvt. Ltd. v. Commissioner of Central Tax, where the petitioner challenged a CESTAT order constituting a Larger Bench to examine the interpretation of Section 142(3) of the CGST Act, 2017, concerning refund of CENVAT credit.

The High Court noted that while the Telangana High Court had taken a view in Granules India Ltd., the Madhya Pradesh High Court had taken a contrary view in Rungta Mines. The CESTAT had therefore proposed a Larger Bench to resolve the conflicting positions.

The Court held that the jurisdictional High Court’s decision remains binding on the Tribunal and authorities within its territorial jurisdiction, unless it is stayed, reversed or overruled by the Supreme Court.

However, since the Granules India judgment was already pending before the Supreme Court in SLP (Civil) No. 17834 of 2025, and an interim order was operating regarding the refunds, the High Court directed that the CESTAT proceedings be deferred until the Supreme Court decides the matter.

Accordingly, the Telangana High Court set aside the CESTAT’s order constituting the Larger Bench and directed that the pending appeal remain deferred until the outcome of the Supreme Court proceedings.