M/S. Annai Infra Developers Limited vs. The Commissioner Of Customs And Central Tax
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The Petitioner, M/s. Annai Infra Developers Limited, challenged an order-in-appeal dated 26.08.2025, passed by the 1st Respondent (Commissioner of Customs and Central Tax, Appeals), which refused to interfere with an order-in-original imposing a penalty on the petitioner. The petitioner filed a writ petition before the Telangana High Court. During the hearing, it was brought to the Court's attention that the Goods and Services Tax Appellate Tribunal (GSTAT) had started functioning. The Court noted that the impugned order-in-appeal was dated 26.08.2025, and the GSTAT had issued an order on 24.09.2025 prescribing the window for filing appeals before it. The Finance Act, 2025, amended Section 112 of the CGST Act, 2017, introducing a proviso regarding appeals involving penalty without tax demand.
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 Goods and Services Tax Appellate Tribunal (GSTAT) within the window period prescribed by the GSTAT'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. If this pre-deposit was made within the stipulated time, no coercive action would be taken against the Petitioner until the GSTAT decided the appeal. However, the Court did not accept the Petitioner's contention that amounts paid towards tax liability during the investigation could be adjusted against the pre-deposit required for filing the appeal before the GSTAT. The Court noted that the impugned order involved a penalty, not a tax liability, and the amended proviso to Section 112 of the CGST Act requires a deposit of 10% of the penalty amount.
Key Issues
1. Whether the Petitioner can be relegated to prefer an appeal before the Goods and Services Tax Appellate Tribunal (GSTAT) in light of its functioning and the prescribed appeal window, considering the impugned order-in-appeal dated 26.08.2025? 2. Whether the Petitioner can adjust amounts deposited as tax liability during the investigation (Form GST DRC-03) against the pre-deposit required for filing an appeal before the GSTAT, particularly when the impugned order imposes only a penalty? Petitioner's arguments: The Petitioner contended that since the penalty amount is substantial, they should be permitted to deposit 10% of the penalty amount within eight weeks. They also sought to adjust amounts already deposited as tax liability in Form GST DRC-03 during the investigation towards the 10% penalty pre-deposit. Respondents' arguments: The learned Senior Standing Counsel for CBIC objected to the Petitioner's submission regarding the adjustment of tax liability deposits. They argued that the amounts paid via Form GST DRC-03 were towards tax liability, whereas the order-in-original and the impugned order-in-appeal only imposed a penalty. Therefore, the Petitioner could not claim the benefit of these tax payments for the penalty pre-deposit.
Sections Cited
Section 112, Section 107, Section 172, Rule 123
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Cause title — parties, addresses and appearances
ORDER: Learned counsel Sri S.Durairaj, representing learned counsel Sri Madanu Naresh, appears for the petitioner. Sri Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs, appears for the respondents.
The order-in-appeal dated 26,O8.2025 is under challenge. The appellate authority has refused to interfere in the order-in-original imposing penalty upon the petitioner firm.
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. I I
2
Section 112 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as, "the Act"), provides for appeal to the Appellate Tribunal. The Appellate Tribunal has issued al order dated 24.09.2025 under Rule 123 of the Goods anrl Services Tax Appellate Tribunal (Procedure) Rules, 2025, classifying the category of cases specified in coiumn (2) of the table appended thereto and the period during which the appeal under Section 172 of the Act r,r,ould be liled before the Appellate Tribunal corresponding to the period during which the orders of the appellate authority were passed.
In the F)resent case, SlNCE the impugnecl order-in- appeal is dat,:d 26.Oa.2O25, the window for liling such appeal is prescribed at serial No.S i.e., comm encing on 01.02.2026 or any date succeeding such date being not later tharr 30.Ct6.2O26. It is further brought to the notice of this Court that the Finance Act, 2025, notified on 29.03.2025, has amended Section 712 of the Act and added the proi,iso to sub-section (B) thereto, which reads as under: \ I
"13O. In section 112 of the Central Goods and Services Tax Act, in sub-section (8), the following proviso shall be inserted, namely: - "Provided that in case of any order demandirig 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 simiiar circumstances, relegated the aggrieved petitioner to prefer an appeal before the Appellate Tribunal within a timeframe. It has also been ordered that subject to deposit of lOoh of the tax liability within the aloresaid time, no coercive action be taken agajnst the petitioner therein till the decision of the Appellate Tribunal in the said appeal.
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 of the Act, the penalty in addition to the arnount payable under the proviso to sub-section (6) of Section lO7 of the Act paid by I I the appellant. \ aggrieved person has to deposit a sum equal to 107o of the 4 - I B. Learnerl counsel for the petitioner submits that since the penaltr ir.; of substaltial amount, the pet tioner firm may be pernritted to make 10% deposit of the penalty amount rvithin a period of eight weeks. He also submits that certain amount deposited as tax liability in Form GST DRC-03 during the investigation may be pernlitted to be deducted lrorn the lOVo of the penalty amount to be deposited as a condition of pre-deposit for pre'ferring the appeal.
To the aJoresaid submission, the learned Senior Standing Counsel for Central Board of Indirect. Taxes and Customs zrppearing lor the respondents has taken objection. He submits that the amount paid by the petitioner firnr as per Form GST DRC-03 annexed to the vvrit petition is towards the tax liability. The order-in- original as affirmed by the impugned order-in-appeal only imposes penaltl,. Therefore, the petitioner firm cannot take the benefit of naking any deposit or payments towards tax liability during the investigation proceedings. \
5 1 0. Upon consideration of the rival submissions of the parties, in the facts and circumstances noted above, the writ petition is disposed of without expressing any opinion on the merits of the case and by giving liberty to the petitioner firm to prefer an appeal before the Appellate Tribunal within the window period prescribed under the order dated 24.O9.2025 issued by the Appellate Tribunal. The petitioner firm shall deposit lO%o of the penalty amount within a period of eight weeks from today. If the petitioner firm makes such pre-deposit within the aforesaid period, no coercive action be taken against the petitioner firm till the decision of the Appellate Tribunal in the appeal to be {iled. We, however, do not accept the contention of the petitioner firm that the amount paid 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 rro order as to costs. I T \
6 To, Miscellaneous applications pending, if any, shall stand closed. . K. BHAVANI SWAMY ASSTS NT REGISTRAR //// TION OFFICER
The Commissiorer of Customs and Central Tax, Office of the Commissioner of Customs and lentral Tax, Appeals I Commissionerale 7lh Floor, GST Bhavan, L B. Stadium Road, Basheerbagh, Hyderabad - 500 004. 2. The Additional Commissioner of Central Tax, Rangareddy GST Commissionerah:, GST Bhavan, H. No. 1-98/7/43, VIP Hills, Jaihind Enclave, Madhapur. Hyderabad-500 01 6. 3. The Additional Director of DGGI, Vishakapattnam Zonal Unit, D. No. 2B-14- 17, Suryabagh, Elesides Melody Theatre, Vishakapatnam .. 530 020. 4. The Additional Director of DGGI, Hyderabad Zonal Unit, H. No. 1-11-22214, Lane Opp. HDFO Bank, Hyderabad - 500 016. 5. One CC to SRI |\4ADANU NARESH, Advocate [OPUC]
One CC to [//s. DOMINIC FERNANDES (SR. SC for CBIC) [OPUC]
Two CD Copies BN I I --l- I
HIGH COURT DATED:2911012,025 ORDER -{Hi.t14 a WP.No.32612 ctf 2025 a. DISPOSING OF THE WRIT PETITION WITHOUT COSTS -) o. 0 t r0\/ 2il5 +.'' (j. (''-'C.s q I )
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.