M/S Sri Rajarajeshwara Swamy Devasthanam vs. The Commissioner Of Central Tax

Held

The Court held that the provisions under Section 107 of the CGST Act do not permit any discretion for the appellate authority to waive the pre-deposit required as a condition for filing an appeal. Consequently, the Court found no error in the impugned order rejecting the petitioner's application for waiver. The Court dismissed the Writ Petition. However, the petitioner was granted liberty to make the pre-deposit before the appellate authority within two weeks for the purpose of prosecuting their appeal. The Court directed that any delay in making the pre-deposit should not come in the way of deciding the appeal on merits. No order as to costs was made.

Facts

The petitioner, M/s Sri Rajarajeshwara Swamy Devasthalam, a temple, approached the High Court challenging an order dated 27.02.2025. This order rejected their application for exemption from pre-deposit under Section 107(1)(b) of the CGST Act, which was a pre-condition for filing an appeal against an original order dated 31.07.2024. The petitioner argued that as a temple, it was not in a position to make the pre-deposit. Furthermore, they contended that the current proceedings were initiated on the same grounds as previous proceedings where they had succeeded at the appellate stage. The petitioner had previously approached the High Court in WP No. 18059 of 2024, where they were granted liberty to avail the appellate remedy and make an application for exemption from pre-deposit. The impugned order rejected the waiver application stating the appellate authority has no discretion.

Key Issues

1. Whether the appellate authority under Section 107 of the CGST Act has any discretion to waive the pre-deposit requirement as a condition for filing an appeal? Petitioner's arguments: The petitioner argued that they are a temple and are not in a position to make the pre-deposit. They also highlighted that the current proceedings are based on the same charges as previous ones where they succeeded, and that their application for waiver of pre-deposit was erroneously rejected. They relied on the previous High Court order granting liberty to seek waiver. Respondents' arguments: The respondents, through their Senior Standing Counsel, argued that the challenge is confined to the rejection of the waiver application. They relied on the Delhi High Court decisions in M/s. Impressive Data Services Private Limited v. Commissioner (Appeals-I) and Anjani Technoplast Ltd. v. CCE, which held that there is no discretion for waiver of pre-deposit. They also referred to the Supreme Court's decision in Chandra Sekhar Jha v. Union of India concerning Section 129E of the Customs Act, 1962, which similarly removed discretion for waiver of pre-deposit.