M/S. Annai Infra Developers Limited vs. The Commissioner Of Customs And Central Tax
Original PDF →Facts
M/s. Annai Infra Developers Limited (the petitioner) filed a writ petition challenging an order-in-appeal dated August 26, 2025, passed by the Commissioner of Customs and Central Tax (the first respondent). This order upheld a penalty imposed on the petitioner. The petitioner sought to set aside the order-in-appeal and stay its operation. During the hearing, the Court was informed that the Goods and Services Tax Appellate Tribunal (the Appellate Tribunal) had commenced functioning. The Court noted that the Appellate Tribunal had issued an order on September 24, 2025, specifying the window for filing appeals under Section 112 of the CGST Act, 2017, based on the date of the appellate authority's order. The impugned order-in-appeal was dated August 26, 2025, placing the appeal window between February 1, 2026, and June 30, 2026.
Held
The Court disposed of the writ petition without expressing any opinion on the merits of the case. It granted liberty to the petitioner firm to prefer an appeal before the Goods and Services Tax Appellate Tribunal within the window period prescribed by the Appellate Tribunal's order dated September 24, 2025. The Court directed the petitioner to deposit 10% of the penalty amount within eight weeks from the date of the order. Subject to this pre-deposit being 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 filing the appeal before the Appellate Tribunal. The Court also noted that the Finance Act, 2025, amended Section 112 of the CGST Act, adding a proviso requiring a deposit of 10% of the penalty for appeals involving only penalty demands.
Key Issues
1. Whether the petitioner can be relegated to prefer an appeal before the Goods and Services Tax Appellate Tribunal, given that the Appellate Tribunal has started functioning and has prescribed a window for filing appeals? 2. Whether the amount deposited by the petitioner as tax liability in Form GST DRC-03 during the investigation can be adjusted against the 10% pre-deposit of the penalty amount required for filing an appeal before the Appellate Tribunal? Petitioner's Arguments: The petitioner argued that they should be permitted to make the 10% deposit of the penalty amount within eight weeks. They also contended that any amount already deposited as tax liability in Form GST DRC-03 during the investigation should be allowed to be deducted from the 10% penalty pre-deposit. Respondents' Arguments: The learned Senior Standing Counsel for the Central Board of Indirect Taxes and Customs objected to the petitioner's submission. They argued that the amount paid in Form GST DRC-03 was 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 payments towards the penalty pre-deposit.
Sections Cited
Section 112, Section 107(6), Rule 123
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Cause title — parties, addresses and appearances
The Court made the following: ORDER lA NO: 1 OF 2025
THE HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH AND THE HON'BLE SRI JUSTICE G.M.MOHII'DDIN WRIT PETITION No.32619 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 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 ol this Court that the Goods and Services Tax Appellate Tribunal (hereinafter referred to aS, "the Appellate Tribunal") has started functioning. I I \
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Section - 12 of the Central Goods and Services Tax Act, 2Ol7 (hereinafter referred to as, "the Act"), provides for appeal to the Appellate Tribunal. The Appeliate Tribunal has issued al order dated 24.09.2025 under Rule 123 of the Goods and Services Tax Appellate Tribunal (Procedure) Rules, 2025, classifying the category of cases specified in column (2) of the table appended thereto and the period during which the appeal under Section 112 of the Act would be filed before the Appellate Tribunal 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 liling 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.Ct6.2O26. It is further brought to tl're notice of this Court that the Finance Act, 2025, notified on 29.03.2025, has amended Section 712 of thr: Act and added the proviso to sub-section (B) thereto, wl-rich reads as under I I
-) "13O. In section 112 of the Central Goods and Services Tax Act, in sub-section (8), the following proviso sha]l be inserted, namely: - 'Provided that in case of any order demanding penalty without involving demand of any tax, no appeal shall be hted 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 an appeal before the Appellate Tribunal within a timeframe. It has a-lso been ordered that subject to deposit of IOok of 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.
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 1O% of the penalty in addition to the amount payable under the proviso to sub-section (6) of Section IO7 of the Act paid by l I the appellant.
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Learned counsel for the petitioner submits that since the penalty is of substantial amount, the pctitioner firm may be pernitted to make 10% deposit of the penalty amount within a period of eight weeks. He also submits that certain arnount deposited as tax liability in Form GST DRC-03 dudng the investigation may be permitted to be deducted fronr the lO%o of the penalty amount to be deposited as a condition of pre-deposit lor prelerring 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 amount per-id by the petitioner tlrm as per Form GST DRC-03 is towards the tax liability. The order-in-original as affirmed by the impugned order-in-appeaLl only imposes pena-lty. Therefore, the petitioner firnr cannot take the benefit of making any deposit or payments towards tax liability during the \ investigation proceedings.
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Upon consideration of the rival submissions of the parties, in the facts ald 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 24.09.2025 issued by the Appellate Tribunal. The petitioner firm shall deposit 1006 of the penalty amount within a period of eight weeks from today. If the petitioner firm makes such pre deposit u'ithin the aforesaid period, no coercive action be taken against the petitioner firm till the decision of the Appellate 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 shall be no order as to costs. \
6 Miscellaleous applications pending, if etny, shall stand closed . .I{.BHAVANI SWAMY ASSI T NT REGIST //' S ION OFFICER o, e Comrnissioner of Customs and Central Tax, Appeals I Commissionerate 7th Floor, GST Bhavan, L.B. Stadium Road, Basheerbagh, Hyderabad 500 004
The Additional Commissioner of Central Tax, Rangareddy GST Commissionerate, GST Bhavan, H. No. 1-98/7/43, VIP Hills, Jaihind Enclave, I\/adhapur, Hyderabad-S00 01 6. 3. The Additional Director of DGGI, Vishakapattnam Zonal Unit, D. No. 2B-'14- 17, Suryabagh, Besides Melody Theatre, Vishakapatnam - 530 020. 4. The Additional Director of DGGI, Hyderabad Zonal Unit, H. No. 1-11-22214, Lane Opp. HDFC Bank, Hyderabad - 500 016 5 One CC to SRI I\,4ADANU NARESH, Advocate. [OPUC]
One CC to SRI DOMINIC FERNANDES, Senior Standing Counsel for CBIC. toPUcl
Two CD Copies. \ BSK '})- IY T 1 The Commissiorer of Customs And Central Tax, Office of t I l )
HIGH COURT DATED:2911012025 ORDER 01 N0\J 2U5 tl\ 1Ht ,. ,. ji k '-^ JJt) DFlsr.l Tc ..fg. rO WP.No.32619 of 2025 DISPOSING OF THE WRIT PETITION WITHOUT COSTS A J
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.