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 30.09.2025, which affirmed an order-in-original imposing a penalty. The petitioner sought to set aside the appellate 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 noted that the impugned order-in-appeal was dated 30.09.2025, and the GSTAT had issued an order prescribing a window for filing appeals, with the period for appeals corresponding to orders passed between 01.02.2026 and 30.06.2026. The Finance Act, 2025, had also 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. It granted the petitioner 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. If this pre-deposit was made within the stipulated period, no coercive action would be taken against the petitioner until the Tribunal's decision. 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 preferring the appeal before the Appellate Tribunal. The Court also stated that there would be no order as to costs.
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 prescribed window for filing appeals for orders passed on or after 30.09.2025? 2. Whether the amount deposited by the petitioner's firm as tax liability during the investigation can be adjusted against the 10% pre-deposit required for filing an appeal against a penalty order? Petitioner's Arguments: The petitioner argued that they should be permitted to make the 10% pre-deposit of the penalty amount within eight weeks. They also contended that a certain amount already deposited as tax liability 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 deposits. They argued that the amount paid as per Form GST DRC-03 was towards tax liability, and since the order under challenge only imposed a penalty, the petitioner could not benefit from such deposits.
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.MOHIIIDDIN WRIT PETITION No.326L4 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, appea-rs for the respondents.
The order-in-appeal dated 30.09.2025 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 &S, 'the Appellate Tribuna-I") has started functioning.
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Section 12 of the Central Goods and Services Tax Act, 2Ol7 (hereir-rafter referred to as, "the Act"), provides for appeal to the Appellate Tribunal. The Appellat.,: Tribunal has issued an order dated 24.09.2025 under R,Lrle 123 of the Goods and Services Ta;< Appellate Tribunal lProcedure) Ru1es, 2025, c,lassifying the category of cases specified in column (2) ,rf the table appended thereto and the period during rvhich tl-re appeal under Section I72 uf the Act would be lilcd before the Appellate Tribunal corresponding to the period during rvhich the orders of tho appellate authority were passed.
In the present case, since the impugned order-in- appeal is date'd 3O.O9.2O25, the window lor filing such appeal is presrcribed at serial No.5 i.e., commencing on 01.02.2026 or any date succeeding such date being not later tharr 30.06.2026. It is further brought to tlre notice of this Court ttrat the Finance Act, 2025, notified on 29.03.2025, has amended Section 712 of the Act and added the pro,riso to sub-section (8) thereto, wLLich reads as under:
-) "130. In section 112 of the Central Goods and Services Tax Act, in sub-section (8), the following proviso shall be inserted, namely:- "Provided that in case of any order demanciing penalty without involving demand of any ta-r, no appeal shall be frled against such order unless a sum equal to ten per cent of the said penalty, in addition to the arnount 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 appea-l before the Appellate Tribunal within a timeframe. It has also been ordered that subject to deposit of 10% of the tax liability within the a-foresaid 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 ol 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 arnount payable under the proviso to sub-section (6) of Section 107 of the Act paid by t \ the appellant.
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Leal'ned ,:ounsel lor the petitioner submits that since the penalty is t:f substantial amount, the petitioner may be permitted to rnake 10% deposit ol the penaity amount within a pericd of eight weeks. He also submits that certain amount deposited by the firm of the pel-itioner as tax liability in Form GST DRC-03 during the investigation may be permitted to be deducted from the 10% of the penalty amourrt to be deposited as a condition of pre- deposit for preferring the appezrl.
To the aforesaid submission, the learnc:d Senior Standing Counsel for Central Board of Indirect l'axes ald Customs appr:aring for the respondents has taken objection. He s,ubmits that the amouirt paid b1' t.he firm of the petitioner as per Form GST DRC-03 is tor.r,arrls the tax liability. The order-in-original as affirmed by the impugned order-in-appe'al only imposes penalty. Therr:lore, the petitioner cannot take the benefit of making anv cleposit or payments towards tax liability during the investigation proceedings. I
l I \ 1 0. Upon consideration of the rival submissions of the parties, in the facts and circumstances noted above, the writ petition is disposed of without expressing aly opinion on the merits of the case arrd by giving liberty to the petitioner 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 shall deposit l.Ooh of the penaity amount within 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 ti1l the decision of the Appellate Tribunal in the appeal to be filed. We, however, do not accept the contention ol the petitioner that the amount, il 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 appeal before the Appellate Tribunal. However, there sha,ll be no order as to costs. ./
*-.1 (t Miscellaneous applications pending, if any, shall stand closecl. //i/ Ii.BHAVANI SWAMY ASSISTANT REGISTRAR I]ECTION OFFICER To,
The Commissioner of Customs and Central Tax, Office of the Commissioner of Customs AND Central Tax, Appeals I Commissionerlte 7th Floor, GST Bhavan, L.B. Stadium Road, Basheerbagh, Hyderabad - 500 004. 2. The Additional Commissioner of Central Tax, Rangareddy GST Commissionerat,:, GST Bhavan, H. No.. 1-98/7/43, VIP Hills, Jaihind Enclave, Itzladhapur, Hyderabad-500 01 6. 3. The Additional Director of DGGI, Vishakapattnam Zonal Unit, D. No. 28-14- 17, Suryabagh, Besides Melody Theatre, Vishakapatnam - 530 020. 4. The Additional Director of DGGI, Hyderabad Zonal Unit, H. No. 'l-1 1-22214, Lane Opp. HDFC Bank, Hyderabad - 500 016. 5. One CC to SRI I\IADANU NARESH, Advocate. IOPUCI
One CC to SRI DOMINIC FERNANDES, Senior Standing Counsel for CBIC. loPUCl Two CD Copies BSK 7 .\ }B t I I
HIGH COURT DATED:2911012025 14 F- s; I4 r4, ORDER '!/ WP.No.32614 of 2025 DISPOSING OF THE WRIT PETITION WITHOUT COSTS t .) /,) a) 01 N[\l 2025 ,ics-^- ^ p !.'.i J ^ c
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.