S. Ashok Kumar vs. The Commissioner Of Customs And Central Tax
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The petitioner, S. Ashok Kumar, Managing Director of M/s. Annai Infra Developers Limited, challenged an order-in-appeal dated 30.09.2025, which upheld an order-in-original imposing a penalty. The petitioner sought a writ of mandamus to set aside the appellate order. During the hearing, it was brought to the court's attention that the Goods and Services Tax Appellate Tribunal (GSTAT) had started functioning. The impugned order-in-appeal was dated 30.09.2025, and the GSTAT had issued an order on 24.09.2025, specifying the window for filing appeals before it. The Finance Act, 2025, had also amended Section 112 of the CGST Act, introducing a proviso regarding pre-deposit for appeals demanding only penalty.
Held
The Court disposed of the writ petition without expressing any opinion on the merits of the case. The petitioner was granted liberty to prefer an appeal before the GST Appellate Tribunal within the window period prescribed by the Tribunal's order dated 24.09.2025. The petitioner was directed to deposit 10% of the penalty amount within eight weeks from the date of the order. Upon such pre-deposit, no coercive action would be taken against the petitioner until the decision of the Appellate Tribunal. However, the Court did not accept the petitioner's contention that any amount paid towards tax liability during the investigation could be adjusted against the pre-deposit for the penalty appeal. The Court noted that the impugned order-in-appeal only imposed penalty, and the proviso to Section 112 of the CGST Act, as amended, requires a deposit of 10% of the penalty.
Key Issues
1. Whether the petitioner can be relegated to prefer an appeal before the GST Appellate Tribunal, considering the functioning of the Tribunal and the relevant timelines? 2. Whether any amount paid by the petitioner towards tax liability during the investigation can be adjusted against the pre-deposit required for filing an appeal before the GST Appellate Tribunal, especially when the impugned order pertains only to penalty? The petitioner argued that they should be permitted to make the 10% penalty deposit within eight weeks and that any amount already deposited as tax liability during the investigation should be deductible from this pre-deposit. The respondents, represented by the Senior Standing Counsel for CBIC, objected to this, contending that any amount paid towards tax liability cannot be adjusted against the pre-deposit for a penalty-only appeal, as the payments were for a different purpose.
Sections Cited
Section 112, Section 107
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Cause title — parties, addresses and appearances
The Court made the following: ORDER
r THE HON'BLE THE CHIEF JUSTICE SRI APARESH K{IMAR SINGH AND THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN WRIT PETITION No.32622 of 2025 ORDER: Learned counsel Sri S.Dr:rairaj, representing learned counsel Sri Madanu Naresh, appears for the petitioner Sri Dominic Fernandes, learned Senior Standing Counsel for Central Board ol Ir-rdirect Taxes and Customs, appears for the respondents.
The order-in-appeal dated 30.O9.2025 is under challenge. The appeliate authority has refused to interfere the order-in original imposing penalty upon the 1n petitioner.
During the course of hearing, it has been brought to the notice of this Court that the Goods and Services Tax Appellate Tribunal (hereinafter referred to as, "the Appellate Tribunal") has started functioning.
Section 712 of the Central Goods and S,:rvices Ta-x Act, 2O i 7 (hereinalter refei-red to as, "the Act"), irrovides for appeal to '-hr: Appcllate Tribunal. The Appeliate Tribunal has issued an order dated 24.09.2025 ur-rder llule 123 of the Goods ar:d Services Tax Appellate Tribunal (Procedure) Rules, 2025. classifying the category of cases specified ir-r column (21 of the table appended thereto ar-li the period during rvhich tl-re appea,l under Section 1 1 2 of the Act u'ould bc filel belore the Appellate Tribunal corresponding to the per-iorl during which the orders of ttre appellate authority ri,ere passed.
In the present case, since the impugncd order-in appeal is dated 3O.O9.2O25, the window for filing such appeal is prescribed at serial No.S i.e., comrnencing on 01.02.2026 or any date succeeding such date being r-rot later than 30.06.2026. It is further brought to :he notice of this Court that the Finance Act, 2025, notified on 29.O3.2O2|;. has amended Section 112 of tl:Le Act and added the proviso to sub-section (B) thereto, rn,hich reads as under-:
"13O. In section 112 of the Central Goods and Services Tali Act, in sub-section (8), the following proviso shall be inscrted, namely:- "Provided that in case of any order demarding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to ten per cent of the said penalty, in addition to the amount payable under the proviso to sub-section (6) of section 1O7 has been paid by the appellant.""
This Court has, in similar circumstances, relegated the aggrieved petitioner to preler an appeal before the Appellate Tribunal within a timeframe. It has a-lso been ordered that subject to deposit of lOo/o of the tax liability within the aforesaid time, no coercive action be taken against the petitioner therein till the decision of the 7 . In the instant case, there is no imposition of tax liability. But, the liability of penalty has been imposed. Under the amended proviso to Section ll2 ol the Act, the aggrieved person has to deposit a sum equal to 1O% of the penalty in addition to the amount payable under the proviso to sub-section (6) of Section lO7 of the Act paid by the appellalt. Appellate Tribuna-l in the said appeal. ) 1
l B. Le:rrned colrnsel lor the petitioner submits that since thc per-raltl rs of substantial amount, the petitiorrer mat' bc permittecl to make 1O7o deposit of the penaily amount within zr period of eight weeks. He also sr-romits that certain zu:noLurt, if any, deposited by the firm o[ the petitioner .rs tax liability in Form GST DRC-03 during the investigation may be permitted to be deducte(l from the 1O% of the p,:nalty amount to be deposited as rr condition of pre-cleposil lor oreferring the appeal.
To tl-re aforesaid submission, ttre learned Senior Stalding Clotrnsel for Central Board of lndirect Taxes anri Customs appearing for the respondents nas taken objection. ['lt: submits that the amount, if any, paid by the firm of thc pr:titioner as per Form GST DRC-0:} is torvards the tar lial;ility. The order-in-original as affirrned by the impugned order-in-appeal only imposes penalty. Therefore, the petitioner cannot take the benefit of making any deposit or payments towards tax liability during the { ( investigatirtn proceedings.
I I I I i i I I I t I i
Upon consideration of the rival submissions of the parties, in the facts and circumstances noted above, the u,rit petition is disposed of '"vithout expressing any opinion on the merits of the case and by giving liberty to the petitioner to preler al appeal before the Appellate Tribunal within tl're window period prescribed under the order dated 24.O9.2025 issued by the Appellate Tribunal. The petitioner shall deposit lOo/o of the penalty amount within a period ol eight weeks from today. If the petitioner makes such pre-deposit within the aforesaid period, no coercive action be taken against the petitioner till the decision of the Appellate Tribunal in the appeal to be filed. We, hou,ever, do not accept the contention of the petitioner that the amount, if any, paid by the firm of the petitioner towards the tax liability during investigation can be adjusted as against pre-deposit to be made for the purposes of preferring the appeal before the Appellate Tribunal. However, there shall be no order as to costs.
6 lVliscr:lliureous applications pending, if an5., shall stand closcd . PONNA KRISHNA TANT REGISTRAR //'
The Commiss.:rier of Customs and Central Tax. Office of the Commissioner of Customs and Central Tax. Appeals I Commissione:rate 7th Floor, GST Bhavan, L.B. []tadium Road, Basheerbagh. Hyderabad- 500 004. 2. The Additional Commissioner of Central Tax, Rangareddy GST Commissionerate, GST Bhavan, H. No.. 1 -98i7i43, VIP Hills, Jaihind Enclave, Madhapur. HyCerabad-500 0'1 6. 3. The Additional Director of DGGI, Vishakapattnam Zonal Unit, D- No. 28--14- 17, Suryabaglr, Besides lvlelody Theatre, Vishakapatnam - 530 020. 4. The Additionai Director of DGGI, Hyderabad Zonal Unit, H No. 1-1 1-22214, Lane Opp. HDFC Bank, Hyderabad - 500 016,
One CC to SRI I\,4ADANU NARESH, Advocate [OPUCI
One CC to SFll DON/INIC FERNANDES, (senior standirrg counsel for CBIC) loPUCl
Two CD Copie :s ass \ \ \ecrrorv oFFrcER To, B I\,4 BS A I I
HIGH COUFTT DATED:2911012025 ORDER WP.No.32622. of 2025 Z.'tt". /.<oY' ,( -) ,-)o 81N0\l M \1 a DISPOSING {]F THE WRIT PETITION WITHOUT COSTS i,.r4't (:Hr,l A iI,l
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.