S. Ashok Kumar vs. The Commissioner Of Customs And Central Tax
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The petitioner, M/s. Annai Infra Developers Limited, filed a writ petition challenging an Order in Appeal No. HYD-GST-RRC-APP1-COMMR-050-25-26 dated 30/09/2025, passed by the Commissioner of Customs and Central Tax. This order affirmed an earlier order-in-original which imposed a penalty on the petitioner. During the hearing, the Court was informed that the Goods and Services Tax Appellate Tribunal (GSTAT) had commenced functioning. The petitioner sought to file an appeal before the GSTAT, which had issued directions regarding the period for filing appeals. The impugned order was dated 30/09/2025, placing the appeal filing window between 01.02.2026 and 30.06.2026, as per Serial No. 5 of the GSTAT's order.
Held
The Court disposed of the writ petition without expressing any opinion on the merits of the case. It granted 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. Subject to 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 any amount paid towards tax liability during the investigation could be adjusted against the pre-deposit for the appeal. The Court also noted the amendment to Section 112 of the CGST Act, 2017, by the Finance Act, 2025, which mandates a pre-deposit of 10% of the penalty for appeals where no tax demand is involved.
Key Issues
1. Whether the petitioner can be relegated to prefer an appeal before the Goods and Services Tax Appellate Tribunal (GSTAT) given that it has commenced functioning and the impugned order falls within the prescribed appeal period? 2. Whether any amount paid by the petitioner towards tax liability during the investigation proceedings can be adjusted against the pre-deposit required for filing an appeal before the GSTAT, particularly when the impugned order imposes only a penalty? Petitioner's arguments: The petitioner contended that they should be permitted to make the 10% deposit of the penalty amount within eight weeks. They also sought to deduct any amount already deposited as tax liability in Form GST DRC-01 during the investigation from the 10% penalty pre-deposit. Respondents' arguments: The learned Senior Standing Counsel for the respondents objected to the petitioner's submission regarding the adjustment of tax liability payments. They argued that any amount paid as per Form GST DRC-03 was towards tax liability, and since the order-in-original and the impugned order-in-appeal only imposed penalty, such payments could not be utilized for the pre-deposit requirement for an appeal against 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 APARESH KUMAR SINGH AND THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN WRIT PETITION No.32615 of 2025 ORDER: Learned counsel Sri S.Durairaj, representing learned counsel Sri Madanu Naresh, appca-rs for the petitioner. Sri Dominic Fernandes, learned Senior Standing Counsel for Central Board of [ndirect Taxes and Customs, appears for 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 penalty upon the petitioner.
During the course of hearing, it has been brought to the notice of this Court that tl-re Goods and Services Tax Appellate Tribunal (hereinafter referred to as, "the Appellate Tribunal") has started functioning. I I I
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Section 112 of the Central Goods and Senices Tax Act,2Ol7 (hereinafter referred to as, "the Act"). grrovides for appeal to t-ht: Appellate Tribunal. The Appell;.le Tribunal has issued an order dated 24.09.2025 r.rnder ;lule 123 of the Goods ard Services Tax Appellate Tribunal (Procedure) Rules, 202 5, classifying the category of case s s;pecified in coiumn (2) of the table appended thereto and the period during which the appeal under Section 1 1 2 ol the Act '"vould be fileC before the Appellate Tribunal corresponding to the perio,l during which the orders of tL:,: appeLlate authoritlr r.l'et e Passed.
In the present case, SlNCC the impugnr:,1 order-in- appeal is dated 3O.O9.2O25, the r.r,indou, for filing such appeal is prescribed at serial No.5 i.e., comrnencing on 01.02.2026 ()r any date succeeding such dat: being not later than 30.06.2026. It is further brought to t:re notice of this Court that the Finance Act, 2025, notilied on 29.O3.2O2:;, has amended Section lI2 of the Act and added the proviso to sub-section (B) thereto, rvhich reads as under:
-l "13O. In section 112 of the Central Goods and Services Tax Act, in sub-section (8), the following proviso sha-ll be inserted, namely: - "Provided that in case of any order dernanding 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 thc amount payable under the proviso to sub-seclion (6) of scction 107 has been paid by the appellant.""
This Court has, in similar circumstances, relegated the aggrieved petitioner to prefer al lt appeal before the Appellate Tribunal within a timeframe. It has also been ordered that subject to deposit ol I O'/,' of the tax liabilitl' \i.ithin 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 112 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 appellart. ) I \
+ B. Learned counsel for the petitioner submits that since the penalt1,' is oi substantial amount, the petiti()ner ma1, be pernritted to make 10% deposit of the penaltl, amount rvithin a period of eight weeks. He also strbmits that certain arnc,unt, if arry, deposited by the flrm of lhe petitioner as tax liability in Form GST DRC-01) during the investigation may be permitted to be deduct:d lrom the 1O"l' of thc penalty amount to be deposited as a conditiorr of pre-depos,t lor preferring the appeal.
To the, aforesaid submission, the learned Senior Standing Counsel for Centra-l 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 to."vards 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 pa5rments 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 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 $ithin the windou, period prescribed under the order dated 24.O9.2025 issued by the Appellate Tribunal. The pctitioner shall deposit 10(X, of the penaltr. amollnt u'itl-rin a period of eight weeks from today. ll the petitioner makes such pre-deposit within the aJoresaid period, no coercive action be taken against the petitioner til1 the decision of the Appellate Tribunal in the appeal to be filed. We, hon,ever, do not accept the contention of the petitioner that the amount, if any, paid by the firm of the petitioner tou,ards 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.
(t Miscell:rneous applications pending, if any, shall stand closed .I(.BHAVANI SWAMY SS TANT REGISTRAR ,// CTION OFFICER
The Commissioner of Customs and Central Tax, Office of the Commissioner of Customs ar"d Central Tax, Appeals I Commissionerate 7th Floor, GST Bhavan. L.B. Stadium Road, Qasheerbagh, Hyderabad - 500 004. 2. The Additional Commissioner of Central Tax, Rangareddy GST Commissionerate, GST Bhavan, H. No. 1-98/7/43, VIP Hills, Jaihind Enclave, [,4adhapur, Hyderabad-500 01 6. 3. The Additional Director of DGGI, Vishakapattnam Zonal Unit, D. No. 28-14- 17, Suryabagl'r, Besides fi/elody Theatre, Vishakapatnarn - 530 020. 4. The Additionai Director of DGGI, Hyderab ad Zonal Unit, H. No. 1-11-22214, Lane Opp HDFC Bank, Hyderabad - 500 016. 5. One CC to Sri [\4adanu Naresh, Advocate [OPUC]
One CC to Sri Dominic Fernandes (senior standing counsel for CBIC) [oPUC]
Two CD Copies To, TJ d
HIGH COURT DATED:2911012025 ORDER i'.tE . (, { WP.No.32615 of 2025 * DISPOSINIG OF THE WRIT PETITION WITHOUT COSTS zo 01 Ntii 2025 DFSpAr C\ \ ,/ \ t I \ 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.