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, which upheld a penalty imposed by the original authority. The petitioner sought to set aside this order. 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 Section 112 of the CGST Act, 2017, provides for appeals to the GSTAT, and the Tribunal had issued an order on 24.09.2025 specifying the categories of cases and periods for filing appeals. The impugned order-in-appeal was dated 26.08.2025, falling within the prescribed window for filing an appeal before the GSTAT.
Held
The Court held that the writ petition should be disposed of by giving liberty to the petitioner 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. Upon making this pre-deposit, 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 penalty pre-deposit. The Court explicitly stated that it was not expressing any opinion on the merits of the case. No costs were awarded.
Key Issues
1. Whether the petitioner can be relegated to prefer an appeal before the Goods and Services Tax Appellate Tribunal, given that the Tribunal has started functioning and has issued procedural orders for filing appeals? (Question of law) Petitioner's arguments: The petitioner argued that they should be permitted to deposit 10% of the penalty amount within eight weeks. They also contended that any amount already deposited by their firm towards tax liability in Form GST DRC-03 during the investigation should be deductible from the 10% pre-deposit required for preferring the appeal. 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 any amount paid via Form GST DRC-03 was towards tax liability, whereas the order-in-original and the impugned order-in-appeal only imposed penalty. Therefore, such payments could not be used to offset the pre-deposit for the 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
THE HON'BLE THE CHIEF JUSTICE SRI APARF^SH KUMAR SINGH AND THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN 1VRIT PETITION No.32616 of 2O25 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.
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 oS, "the Appellatc Tribunal") has started functioning. I I
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Scction ll2 of the Central Goods and St:rvices Tax Act, 2017 (hereinafter referred to as, "the Act"), provides for appeal to the Appellate Tribunal. The Appellate Tribunal has issued an order dated 24.09.2025 under Rule 123 ol the Goods ancl Serrrices Tax Appellate Tribunal (Procedure) Rules, 2025, classifying the category of cases specified in column (2) of the table appended thereto and the period during r,r'hich the appeal under Section 112 of the Act would be fiir:d before the Appellate Tribunal corresponding to the period during which the orders of tht: appellate authority were Passed.
In the present case, since the impugnecl order-in- appeal is date'd 26.08.2025, the window lor liling such appeal is prescribed at serial No.S i.e., commencing on 01.02.2026 or any date succeeding such date being not later tha:e 30.06.2026. It is further brought to the notice of this Court that the Finance Act,2025, notified on 29.03.2025, hirs amended Section ll2 of th(: Act and- added the pror.iso to sub-section (B) thereto, which reads as under / \
- "13O. In section 112 of the Central Goods and Services Tax Act, in sub-secLion (8), the following proviso shali be inserted, namely:- "Provided that in case of any order demanding 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 107 has been paid by the appellant.""
This Court has, in similar circumstances, relegated the aggrieved petitioner to prefer AI appeal before the Appellate Tribunal within a timeframe. It has also been ordered that subject to deposit of 1O% of the tax 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. 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 aggrieved 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 lO7 of the Act paid by I I \ the appeilant.
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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 within a peri,rd of 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 rnay be permitted to be deductecl from the lOnh of the penalty amount to be deposited as a condition of pre-deposit lbr preferring the appeal.
To the raforesaid 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 amount, 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 benelit of making any deposit or payments towards tax liability during the investigation proceedings. I \
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Upon consideration of the rival submissions of the parties, in the facts and circumstances noted above, the writ petition is disposed ol 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 r,r,eeks 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 appea-l before the Appellate Tribuna-l. However, there shall be no order as to costs.
.-- 6 To, Miscellaneous applications pending, if any, shall stand closed. S .BHAVANI SWAMY TANT REGISTRAR AS //II SECTION OFFICER
The Commissioner of Customs and Central Tax, Office of the Commissioner of Customs and Central Tax, Appeals I Commissionerate 7th Floor, GST Bhavan, L.B. Stadium Road, Basheerbagh, Hyderabad - 500 004. 2. The Additional Commissioner of Central Tax, Rangareddy GST Commissionerate, GST Bhavan, H. No.1-98/7i43, VIP Hills, Jaihind Enclave, tVladhapur, Hyderabad-500 01 6. 3. The Additional Director of DGGI, Vishakapattnam Zonal Unit, D. No. 2B-14- 17, Suryabagh, Besides MelodyTheatre, Vishakapatnam 530 020. 4. The Additional Director of DGGI, Hyderabad Zonal Unit, H. No. 1-1 1-22214, Lane Opp. HDFC Bank, Hyderabad - 500 016. 5. One CC to SRI N4ADANU NARESH, Advocate. [OPUC]
One CC to SRI DOMINIC FERNANDES, Senior Standing Counsel for CBIC. loPUCl
Two CD Copies. BSK II /
HIGH COURT c3 1t'lE S I4 r€ k Llr 1i l! C) 01 l,l[tJ 2925 ORDER WP.No.32616 of 2025 DISPOSING OF THE WRIT PETITION WITHOUT COSTS OATC 'i?-t) a, { DATED:291101i1025 I Ir ./'
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.