S. Ashok Kumar vs. The Commissioner Of Customs And Central Tax
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The petitioner, M/s. Annai Infra Developers Limited, is challenging an Order in Appeal No. HYD-GST-RRC-APP1-CO[UIVR-033-25-26 dated 26.08.2025, passed by the Commissioner of Customs and Central Tax. This order affirmed an order-in-original that imposed a penalty on the petitioner. The petitioner filed a writ petition before the High Court seeking to set aside the impugned order. 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 also noted that the Finance Act, 2025, amended Section 112 of the CGST Act, introducing a proviso regarding pre-deposit for 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 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. Upon making this pre-deposit, 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 amounts paid towards tax liability during the investigation could be adjusted against the pre-deposit for the appeal. No order as to costs was made.
Key Issues
1. Whether the petitioner can be relegated to prefer an appeal before the GST Appellate Tribunal, considering the functioning of the Tribunal and the relevant procedural rules and amendments? (Section 112, Section 172 of CGST Act, Rule 123 of GSTAT (Procedure) Rules, 2015, Finance Act, 2025 amendment to Section 112(8)). Petitioner's arguments: The petitioner argued that they should be permitted to make a 10% deposit of the penalty amount within eight weeks. They also sought to deduct any amount already paid as tax liability in Form GST DRC-03 during the investigation from this pre-deposit. Respondents' arguments: The respondents, represented by the Senior Standing Counsel for CBIC, objected to the petitioner's submission regarding the deduction of tax liability payments. They contended that any amount paid as tax liability in Form GST DRC-03 during the investigation pertains to tax demand and cannot be adjusted against the pre-deposit required for an appeal concerning only a penalty.
Sections Cited
Section 112, Section 172, Section 107(6)
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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 WRIT PETITION No.3262L of 2O25 ORDER: Learned counsel Sri S.Durairaj, representing learned counsel Sri Madalu Naresh, appears for the petitioner. Sri Dominic Fernandes, learned Senior Standing Counsel for Central Board ol 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 as, "the Appellate Tribunal") has started functioning. It I I t 4rp THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN )
2
Sectror: 172 of the Central Goods and Services Ta-x Act,2Ol7 (hr:reinafter referred to as, "the Act"), provides for appeal to the Appellate Tribunal. The Appell; te Tribunal has issuerl zrr order dated 24.09.2025 under Rulc 123 of the Goods and Services Ta-x Appellate Tribunal (Procedure) Rules, 20!15, classifying the category of cases spccified in column (2) of the table appended thereto an<l the pcriod during whicr the appeal under Section I12 of the Act would be llled before the Appellate Tribunal corresponding to the period during which the orders of thc appellate authority rvere passed.
In the present case, since the impugnr:d order-in- appeal is deLted 26.08.2025, the window for filing such appeal IS prescribed at serial No.S i.e., commencing on 01 .02.2026 or any date succeeding such datr: being not later than 30.06.2026. It is further brought to i,he notice of this Court that the Finance Act, 2025, notified on 29.03.2025, has amended Section 712 of the Act and added the proviso to sub-section (B) thereto, n'hich reads as under: I
i"l I "13O. In section 112 of the Central Goods errd Services Tax Act, in sub-section (8), the following proviso shall be inserted, namely:- "Provided that in case of arry order demanding penalty without involving demand of any tax, no appeal shatl 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) ol section 107 has been paid by the appellant.""
This Court has, in similar circumstances, relegated the aggrieved petitioner to prefer alt appeal before the Appellate Tribunal u'ithin a timeframe . It has also been ordered that subject to deposit of 1.O'k, 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 arnended proviso to Section 172 of the Act, the aggrieved person has to deposit a sum equal to 1O% of the penalty in addition to the arnount payable under the proviso to sub-section (6) of Section lO7 of the Act paid by the appellant. - )
4 B. Learned counsel for the petitioner submil-s that since the penalty i,s of substantial amount, the petiti,:ner may be permitted to make 1O% deposit of the penztlty arnount u,ithin a period of eight u,ecks. He also sltbmits that certain amo unt, if any, deposited by the linn of the petitioner as tax liability in Forrn GST DRC 03 during the investigation may be permitted to be deductcd from the looh of the penalty amount to be deposited as a condition of pre-deposit for preferring the appeal. 9 . 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, 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 affirrned by the impugned order-in-appeal only imposes penaltl'. Therefore, the petitioner cannot take the benefir of making an5u deposit or payments towards tax liability during the investigation proceedings.
I 1 0. 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 iiberty to the petitioner to prefer an appeal before the Appellate Tribunal .*'ithin the window period prescribed under the order dated 24.O9.2025 issued by the Appellate Tribunal. The petitioner shall deposit l Oolo of the penalty amount '"r,ithin 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 Appeilate Tribunal in the appeal to be filed. We, honever, do not accept the contention of the petitioner that the amount, if any, paid by the iirm ol the petitioner tolvards 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 Miscellaneous applications pending, if 'rn1', sha1l stand closed PONNA KRISHNA ANT REGISTRAR ,//
The Cornmrss oner of Customs and Central Tax, Office r>f the Commissroner of Customs ard Central Tax, Appeals I Commissionerate 7th Floor. GST Bhavair, L.B []tadium Road, Basheerbagh, Hyderabad 500 004. 2. The Additional Commissioner of Central Tax, Rangareddy GST Commissionerate, GST Bhavan, H, No-. 1-98/7/43, VIP tlills, Jaihind Enclave. li.,4adhapur, Hylerabad-500 01 6. 3. The Additional Director of DGGI, Vishakapattnam Zonal tJnit, D. No. 28-14- 17, Suryabagl-. Besides Melody Theatre, Vishakapatnarr 530 020. 4 The Additional Directorof DGGI, HyderabadZonal Unit, H. No.1-11-22214, Lane Opp. HDFC Bank, Hyderabad 500 016. 5. One CC to Sr, lvladanu Naresh, Advocate IOPUC]
One CC to Sri Dominic Fernandes (senior standing counsel for CBIC) [oPUC]
Two CD Copies I I CTION OFFICER To, TJ I-} S \ s) ) "t HIGH COURT DATED:2911Ct12025 ORDER WP.No.32$21 of 2025 o!i- 1HE S14/' 'i -) il ,) ItJ B 1 riir:u 2i25 t) ,.',/ DISPOSING OF THE WRIT PETITION WITHOUT COSTS C\ '.J i : l l .'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.