In a notable judgment, the Delhi High Court has reaffirmed that courts do not have discretionary powers to waive the mandatory pre-deposit required under Section 107(6) of the Central Goods and Services Tax (CGST) Act, 2017 for filing an appeal. The ruling underscores the strict statutory compliance necessary for invoking appellate jurisdiction under GST law.
Understanding Section 107(6) of the CGST Act
As per Section 107(6) of the CGST Act, 2017:
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The entire amount of admitted tax, interest, and penalty must be deposited before filing an appeal.
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In the case of disputed tax, 10% of the amount in dispute must be deposited as a pre-deposit.
Case Background: M/S Impressive Data Services Pvt. Ltd.
In the case titled M/S Impressive Data Services Private Limited v. Commissioner (Appeals-I), Central Tax GST, Delhi (Case No.: W.P.(C) 4662/2025), the Petitioner challenged the demand for pre-deposit on the grounds of financial hardship. The company highlighted that it had outstanding receivables exceeding ₹6.4 crores from various Government Departments, along with securities worth ₹4 crores held by these entities.
The dispute originated after the Respondent issued a Show Cause Notice (SCN) alleging wrongful availment of Input Tax Credit (ITC). The Petitioner argued that the issue arose from clerical errors during the transition to GST, leading to incorrect turnover being reported, even though the disputed ITC was never actually availed.
Court’s Findings and Legal Reasoning
The Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta held that:
“Section 107(6) of the CGST Act does not provide any discretion to the Court to waive the mandatory pre-deposit requirement.”
The court referenced the precedent set in Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, Dehradun & Anr., where it was held that post the 2014 amendments to Section 35F/129E of the Excise Act, pre-deposit is a mandatory condition for the maintainability of an appeal before the CESTAT.
Accordingly, the Court dismissed the plea for waiver, affirming the statutory mandate. However, it granted liberty to the Petitioner to approach the appropriate Appellate Authority and make representations regarding the funds lying with Government departments as potential adjustment toward the pre-deposit.
Legal Implication
This ruling reiterates that pre-deposit is a non-negotiable statutory obligation under GST law. Taxpayers must ensure compliance with Section 107(6) when filing appeals, irrespective of their financial constraints or pending recoverables from Government entities.
Case Details
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Case Title: M/S Impressive Data Services Pvt. Ltd. v. Commissioner (Appeals-I), Central Tax GST, Delhi
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Case Number: W.P.(C) 4662/2025
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Court: Delhi High Court
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Bench: Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta
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Counsel for Petitioner: Mr. Pranay Jain
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Counsel for Respondent: Mr. Ruchesh Sinha
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