S. Ashok Kumar vs. The Commissioner Of Customs And Central Tax
Original PDF →Facts
The petitioner, M/s. Annai Infra Developers Limited, challenged an order-in-appeal dated 26.08.2025, passed by the Commissioner of Customs and Central Tax. This order upheld a penalty imposed on the petitioner. The petitioner filed a writ petition before the High Court of Telangana. During the hearing, it was brought to the court's attention that the Goods and Services Tax Appellate Tribunal (GSTAT) had commenced 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, 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 involving penalty without tax demand.
Held
The Court decided to dispose 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 any amount paid towards tax liability during the investigation could be adjusted against the penalty pre-deposit required for filing the appeal before the GSTAT. The respondents' objection on this point was upheld.
Key Issues
1. Whether the petitioner can be relegated to prefer an appeal before the Goods and Services Tax Appellate Tribunal (GSTAT) given the commencement of its functioning and the issuance of an order by the GSTAT specifying appeal filing windows? (Section 112 of the CGST Act, 2017, and Rule 123 of the GSTAT (Procedure) Rules, 2025). 2. Whether the petitioner can claim deduction of any tax liability paid during investigation (via Form GST DRC-03) from the 10% penalty pre-deposit required for filing an appeal before the GSTAT, especially when the impugned order only imposes penalty? (Proviso to Section 112(8) of the CGST Act, 2017). Petitioner's arguments: The petitioner sought permission to make the 10% deposit of the penalty amount within eight weeks. They also contended that any tax liability already deposited during the investigation could be deducted from the 10% penalty pre-deposit. Respondents' arguments: The respondents objected to the petitioner's request to adjust tax liability payments towards the penalty pre-deposit, arguing that the payments were towards tax and the order only imposed penalty.
Sections Cited
Section 112, Section 107, Rule 123
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Cause title — parties, addresses and appearances
The Court made the following: ORDER 1- -------
THE HON'BLE THE CHIEF JUSTICE SRI APARE.SH KIIMAR SINGH AND THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN WRIT PETITION No.32617 of 2025 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 relused to interfere in the order-in-original imposing penalty upon the 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 ?S, "the Appellate Tribunal") has started functioning. I I \
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Section 112 of the Central Goods and Serviccs Tax Act, 2Ol7 (hert:inafter referred to as, "the Act"), provides fcr appeal to the Appellate Tribunal. The Appellate Tribunal has issued an order dated 24.09.2025 under RuIe 123 of the Goods and Services Tax Appellate Tribunal (Procedure) Rules, 2025, classifying the category of cases specilied in column (2) of the table appended thercto ald the period during rvhich the appeal under Section ll2 of the Act would be filed before the Appellate Tribuna,l corresponding to the period during which the orders of the appellate authority were passed
In the present case, since the impugned order-in- appeal is dated 26.08.2025, the window for filing such appeal is prescribed at serial No.5 i.e., commencing on 01.02.2026 or any date succeeding such date being not later than 3O.C:6.2O26. It is further brought to the notice of this Court that the Finance Act, 2025, notified on 29.03.2025, has amended Section ll2 of the Act and added the proviso to sub-section (8) thereto, which reads I as under: I
- \ \ "13O. In section I 12 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 of any order demanding penatty without involving demand of any tax, no appeal shall be hled 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 prefer A'rI appeal before the Appellate Tribunal within a timefrarne. It has also been ordered that subject to deposit of lOo/o ol the tax liability within the aforesaid time, no coercive action be taken against the petitioner therein till the decision of the Appellate Tribunal in the said appeal. 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 of the Act, the ag$ieved person has to deposit a sum equal to 10% of the penalty in addition to the amount payable under the proviso to sub-section (6) of Section 107 of the Act paid by f the appellant. I
-t \ B. Learned counsel for the petitioner submits that since the penalty is of substantial amount, the petitioner may be permitted to make 10% deposit of the penalty amount rx,ithin a period ol eight weeks. He also submits that certain amount, if any, deposited by the firm of the petitioner as tax liability in Form GST DRC-03 during the investigation rray be pernritted to be deductecl from the lO%o of the penalty amount to be deposited as a condition of pre-deposit lor preferring the appeal.
To the aforesaid submission, the learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs appearing for the respondents has taken objection. He submits that the amotint, if any, paid by the firm of the petitioner as per Form GST DRC-03 is towards the tax liability. The order-in-original as affirmed 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 investigation proceedings. I )
) I 1 0. Upon consideration of the rival submissions of the parties, in the lacts 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 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 shall deposit lOo/o of the penalty amount within a period of 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, however, 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 Appeliate Tribunal. Hor.r,ever, there shall be no order as to costs. I / \
6 To, Miscellaleous applications pending, if zLny, shaLll stand closed D/- .BHAVANI SWAMY TANT REGISTRAR //// IJECTION OFFICER
The Commissioner of Customs and Central Tax, Office of the Commissioner of Customs and ,lentral Tax, Appeals I Commissionerate 7th Floor, GST Bhavan, L.B. Stadium Road, Basheerbagh, Hyderabad -500 004. 2. f he Additional Commissioner of Central Tax, Rangareddy GST Commissionerate, 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 Additionai Director of DGGI, Hyderabad Zonal Unit, H No. 1-11-22214, Lane Opp. HDFC Bank, Hyderabad -500 016. 5. One CC to SRI I\IADANU NARESH, Advocate. [OPUC]
One CC to SRI DOMINIC FERNANDES, Senior Standing Counsel for CBIC. loPUcl
Two CD Copies. BSK I 8*
HIGH COURT DATED:2911012t025 ORDER ii4,: $i a o 20ffi g 1 r[\l t o. {- :)o oC.sP iTcF ?-") DISPOSING OF: THE WRIT PETITION WITHOUT COSTS I \". ,,/ WP.No.32617 af 2025 q
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.