M/S. Annai Infra Developers Limited vs. The Commissioner Of Customs And Central Tax
Original PDF →Facts
M/s. Annai Infra Developers Limited (petitioner) filed a writ petition challenging an order-in-appeal dated 30.09.2025, which upheld a penalty imposed by the original authority. The petitioner's registered head office is in Tamil Nadu, and its Kerala address is also provided. The respondents are various GST authorities, including the Commissioner of Customs and Central Tax, Appeals, the Additional Commissioner of Central Tax, and the Additional Director of DGGI. The petitioner sought to set aside the impugned order and stay its operation. During the hearing, it was brought to the court's attention that the Goods and Services Tax Appellate Tribunal (Appellate Tribunal) had started functioning, and specific timelines for filing appeals before it were established.
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 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 within the stipulated time, no coercive action would be taken against the petitioner until the Appellate Tribunal decides 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 pre-deposit for preferring the appeal before the Appellate Tribunal. The ratio decidendi is that when a statutory appellate forum becomes functional, High Courts, in writ jurisdiction, should ordinarily relegate parties to that forum, subject to appropriate directions regarding pre-deposit and interim relief.
Key Issues
1. Whether the petitioner can be relegated to prefer an appeal before the Goods and Services Tax Appellate Tribunal, given that it has started functioning and has issued orders regarding the period for filing appeals under Section 112 of the CGST Act, 2017? 2. Whether the amount deposited by the petitioner as tax liability in Form GST DRC-03 during the investigation can be deducted from the 10% penalty amount required as a pre-deposit for preferring an appeal before the Appellate Tribunal, as per the amended proviso to Section 112(8) of the CGST Act, 2017? Petitioner's Arguments: The petitioner argued that since the penalty is substantial, they should be permitted to deposit 10% of the penalty amount within eight weeks. They also contended that amounts 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 respondents, represented by the senior standing counsel for CBIC, objected to the petitioner's submission regarding the adjustment of tax liability payments. 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 penalty, and thus, the petitioner could not claim the benefit of such payments towards the penalty pre-deposit.
Sections Cited
Section 112, Section 107, Rule 123
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Cause title — parties, addresses and appearances
The Court made the,following: ORDER
THD HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH AND THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN WRIT PETITION No.3262O 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 alrd Customs, appears lor the respondents.
The order-in-appeal dated 30.O9.2025 is under challenge. The appellate authority has refused to interfere in the order-in-original imposing penalQz 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 ?s, "the Appellate Tribunal") has started functioning.
a 4. Sectiorr 112 of the Central Goods and Services 'lax Act, 2017 (h,:reinafter relerred to as, "the Act"), provides for appeal to the Appellate Tribunai. The Appellate 'lribunal has issue<l :ur order dated 24.09.2025 under Rule 123 ol the Go<ids arrcl Services Tax Appellate Tribunal (Procedurre) Rules, 2025. ciassifying the category of cases specified in column (2) ol the table appended thereto and the period during which the appeal under Section 112 ol the Act w.ould l:e lile cl before the Appellate Tribunal cclr-responding to the period during which the orders of the appellate authoritl, rvere passed.
In tlre present case, since the impugned order-in- appeal is d:rted 3O.O9.2O25, the window for liling such appeal IS prescribed at serial No.S i.e., comrnencing on O1.O2.2O25 or any date succeeding such datt: being not Iater than 3Cr.06.2026. It is further brought to the notice of this Court that the Finance Act, 2025, rotified on 29.O3.2O2), l-ras amended Section ll2 of ttre Act and added the proviso to sub-section (B) thereto, ivhich reads as under:
"13O. In section 112 of the Central Goods and Servrces Ta-x Act, in sub-section (8), the follou.ing proviso sha1l be inserted, namely:- 'Provided that in case of any order demanding penalty without involving demand of any tax, no appeal shall bc 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 an appeal before the Appellate Tribunal within a timeframe. It has also been ordered that subject to deposit of loyo 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 pena-lty has been imposed. Under the amended proviso to Section 712 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 107 of the Act paid by -) the appellant.
.1 B. Learned counsel for the petitioner submits that since the penaltv is ol substantial amount, the petitioner firm may be pcrnritted to make 10% deposit ' of the penaltv arrror-rnt r.r,ith;n a period ol eight weeks. He aiso submits that certail'r :Lmount deposited as tax liabilitl, in Form GST DRC-03 dtrrir.rg the investigation may be permitted to be deducted lrom the 10% of the penalty amount to be depositecl :rs a condition ol pre-deposit for 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 amount pzrid by the petitioner lirrn as per Form GST DRC-03 is towards the tax liability. The order-in-originai as affirmed by the impugned order-in-appr:al only imposes penalty. Therefore, the petitioner lirm cannot take the benefit of nraking any deposit or payments towards tax liability during the investigation proceedings. t ! I
)
Upon consideration of the riva-l submissions of the parties, in the facts and circumstalces noted above, the nrit petition is disposed of rvithout expressing aly opinion on the merits of the case and by giving liberty to the petitioner firm to prefer an appeal before the Appellate Tribunal rn ithin the window period prescribed under the order dated 24.O9.2025 issued by the Appellate Tribunal. The petitioner firm shali deposit 1O'Y' of the penaltv amount u,ithin a period of eight weeks from today. If the petitioner firm makes such pre-deposit rn ithin the aforesaid period, no coercive action be taken against tl-re petitioner firm ti11 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 ta-x liability during investigation can be adjusted S against pre-deposit to be made for the purposes of preferring the appeal before the Appellate Tribunal. Holever, there sha11 be no order as to costs.
6 Miscellrrneous applications pending, if aly, slrall sland closr:d PONNA KRISHNA S T REGISTRAR ,// CTION OFFICER The Comm;ss oner of Customs and Central Tax, Office of the Commissioner of Customs arrd Central Tax. Appeals I Commissionerate 7th Floor. GST Bhavan, L.B. Stadium Road, Basheerbagh, Hyderabad - 500 004. The Additional Commissioner of Central Tax, RangaredCy GST Commissionerate. GST Bhavan, H. No.- '1-98i 7/43, VIP Hills, Jaihind Enclave. li4adhapur, Hyderabad-500 0'1 6. The Additionai Director of DGGI, Vishakapattnam Zonal Jnit, D. Nc. 28-'14- 17, Suryabagh. Besides tt4elody Theatre, Vishakapatnam - 530 020. The Additional Director of DGGI, Hyderabad Zonal Unit, H. No. 1-1 1-22214, Lane Opp HfrFC Bank, Hyderabad - 500 016. One CC to Sri lt4adanu Naresh, Advocate [OPUC] One CC to Sri Dominic Fernandes (senior standing counsel for CBIC) loPUCl Two CD Copies S To, 1 2. 3.
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HIGH COURT' DATED:29 {1012A25 ORDER WP.No.3262Ct of 2025 DISPOSING OF THE WRIT PETITION WITHOUT COSTS q \ ,),- (n( 16' zrffi !o7 -6,-.rl-Q i I.i S Bl llnu $ I I ! i I I U \ i \
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.