M/S. Annai Infra Developers Limited vs. The Commissioner Of Customs And Central Tax
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M/s. Annai Infra Developers Limited (Petitioner) filed a writ petition challenging an Order in Appeal No. HYD-GST-RRC-APP1-CON/M-053-25-26 dated 30.09.2025, passed by the Commissioner of Customs and Central Tax (1st Respondent). The impugned order upheld a penalty imposed upon the petitioner firm. The petitioner sought to set aside this order. During the proceedings, it was brought to the Court's attention that the Goods and Services Tax Appellate Tribunal (Appellate Tribunal) had commenced functioning. The petitioner had deposited certain amounts as tax liability in Form GST DRC-03 during the investigation. The petitioner requested to adjust these deposits towards the 10% pre-deposit of the penalty amount required for filing an appeal before the Appellate Tribunal.
Held
The High Court disposed of the writ petition without expressing any opinion on the merits of the case. The Court granted liberty to the petitioner firm 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. If this pre-deposit was made within the stipulated time, 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 the amount paid towards tax liability during the investigation could be adjusted against the pre-deposit for preferring the appeal. The Court also stated that there would be no order as to costs.
Key Issues
1. Whether the petitioner can adjust the amount deposited as tax liability in Form GST DRC-03 during the investigation towards the pre-deposit required for filing an appeal before the GST Appellate Tribunal, when the impugned order only imposes a penalty? The Petitioner argued that since a substantial penalty was imposed, they should be permitted to deposit 10% of the penalty amount within eight weeks. They further contended that the amount already deposited as tax liability in Form GST DRC-03 during the investigation should be allowed to be deducted from this 10% penalty pre-deposit. The Respondents (Revenue) objected to this submission. They argued that the amount paid by the petitioner in Form GST DRC-03 was towards tax liability, and since the order-in-original and the impugned order-in-appeal only imposed penalty, the petitioner could not claim the benefit of making any deposit or payment towards tax liability during the investigation proceedings as a pre-deposit for the penalty appeal.
Sections Cited
Section 112, Section 107, Rule 123
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Cause title — parties, addresses and appearances
The Court made the following: ORDER
THE HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH AND WRIT PETITION No.32613 of 2025 ORDER: Learned counsel Sri S.Durairaj, representing learned counsel Sri Madar-rr-r Naresh, appears for the petitioner. Sri Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs, appea-rs for the respondents.
The order-in-appeal dated 30.O9.2025 is under in the order-in-originai 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 THE HON'BLE SRI JUSTICE q.M.MOHIqD,DIN challenge. The appellate authoritl' has relused to interfere
2
Section 1.12 of the Centra,i Goods and S:rvices Tax Act, 2Ol7 (hr:reinafter referred to as, "the Act"). qrrovides for appeal to th,: Appellate Tribunal. The Appellatc Tribunal has issuect an order dated 24.O9 .2025 under ttule 123 ol the Goods and Services Tax Appellate Tribunal (Procedure) Rules, 2025, classifying the category. of cases specified in column (2) c,f the table appended thereto and the period during rvh iclr the appeal under Section I 1 2 of thc Act u'ould be filed before the Appellate Tribunal correspondir-rg to the perio,l during which the orders of th,3 appe liate authority rvere passed.
In t1-re present case, since the impugr-rc:l order-in appeal is dated 3O.O9.2O25, the window for filing such appeal is prescribed at serial No.5 i.e., comrrrencing on 01.02.2026 or any date succeeding such datc' being not later tharr 30.06.2026. It is further brought to ll.re notice of this Court that the Finance Act, 2025, rrotified on 29.03.2025, has amended Section 112 of the Act and added the proviso to sub-section (8) thereto, rihich reads as under:
J I 1 "13O. In section 112 of the Centra.l Goods and Services Tax Act, in sub-section (8), the following proviso sha.ll be inserted, namely: - "Provided that in case ol any order demanding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to tcn per cent of the said penalty, in addition to the amount payable under the proviso to sub-section (61 of section 107 has been paid by the appellant. ""
This Court has, in similar circumstances, reiegated the aggrieved petitioner to prefer an appeal belore the Appellate Tribunal u,ithin a timefrarne. It has also been ordered that subject to deposit of 10(/o of the ta-x liability within the aforesaid time, no coercive action be taken against the petitioner therein till the decision of the Appeliate 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 112 of the Act, the aggrieved person has to deposit a sum eqllal to 1O% of the penalty in addition to the amount payable under the proviso to sub-section (6) of Section 107 of the Act paid by the appellant.
I -+
Learncc counsel for the petitioner submils that sincc the penaltv is of substantial amount, the pctitioner lirm may be pcrreitted to make 10% deposit of r-rc penaltl' arnount with-n a period of eight weeks. He also subrnits that certain eLmount deposited as tax liabiiity in Folm GST DRC-03 during the investigation may be permitteC to be deducted ll'om the 10% of the penalty amount to be deposited ils a condition of pre-deposit lor prr:ferring the appeal
To t['re aforesaid submission, the learned Senior Standing Counsel for Central Board of Indirect Taxes ar-rcl Customs appearing for the respondents lras taker-r objection. Ile submits that the amount paid b-r, the petitioner firrr as per Form GST DRC-03 is tor,r'zrrds the tax Iiability. The order-in-original as affirmed by the impugned order-in-appeal only imposes penalty. Therelore, the petitioner firm cannot take the benefit of nrakir-rg any deposit or payments towards tax liability cluring the I investigation proceedings.
d -)
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 1O% of the pena1t1,' amount within a period of eight rneeks from today. If the petitioner firm makes such pre-deposit w'ithin the a-foresaid period, no coercive action be taken against the petitioner firm til1 the decision of the Appeilate Tribunal in the appeal to be filed. 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 shail be no order as to costs.
, 6 r) Miscellareous applications pending, if an-y, shall stand closecl 55 .BHAVANI SWAMY TANT REGISTRAR To, ,i/ \cror.r oFFrcER
The Conrmissioner of Customs and Central Tax, Office of the Commissioner of Custom:; e nd Central Tax, Appeals I Commissioncrate 7th Floor, GST Bhavan, L.B. []tadium Road, Basheerbagh, Hyderabad - 500 004. 2. The Additional Commissioner of Central Tax. Ranqareddy GST Commissionerate, GST Bhavan, H. No. 1-98/7/43, VIP t{ills, Jaihind Enclave, I\rladhapur, Hyderabad-500 01 6. 3. The Additional Director of DGGI, Vishakapattnam Zon:,1 Unit, D. No. 28-14- 17, Suryabagh. Besides Melody Theatre, Vishakapatnanr - 530 020. 4. The Additionel Director of DGGI, Hyderabad Zonal Un t, H No 1-11-22214, Lane Opp. HLTFC Bank, Hyderabad - 500 016. 5 One CC to SRI |'4ADANU NARESH, Advocate IOPUC]
One CC to Stll. DOMINIC FERNANDES (senior stand,ng counsel for CBIC) loPUCl
Two CD Copies Btu TKS I i I I I
HIGH COURT DATED:29114t2025 ORDER WP.No.32613 of 2025 c lt) Bl NtlV tnn 1, , a rc ,,' DISPOSING OF THE WRIT PETITION WITHOUT CCISTS ^ A .A
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.