Ssukrit Forwarding Agency, Through Its Partner Shri Sumit Kumar Singhania vs. The Union Of INDIA Through The Revenue Secretary, Department Of Revenue, Ministry Of Finance

Held

The Court held that while there may have been a procedural glitch in the petitioner's part in effecting the pre-deposit, it was far from saying that no pre-deposit was made at all. The impugned order at paragraph 6 acknowledged the declaration of payment and the challan dated July 9, 2024. The Court found that the principles of natural justice and fair play would have required the Appellate Authority to issue a notice to the petitioner, pointing out the procedural defect and granting a reasonable time to cure it, which was not done. The Court concluded that procedure and form had been given precedence over substance, and the right to appeal is a valuable right. Therefore, the Court quashed and set aside the impugned order and remanded the matter to the Appellate Authority to decide it on its own merits. The petitioner stated that the defect would be cured within four weeks, and the Appellate Authority would consider the appeal on merits after the defect is cured and the pre-deposit amount of Rs. 85,661/- is secured. All contentions on merits were left open.

Facts

The petitioner, Ssukrit Forwarding Agency, challenged an Order-in-Appeal dated July 31, 2025, which dismissed their appeal against an Order-in-Original dated April 19, 2024. The dismissal was based on the alleged non-compliance with the mandatory pre-deposit requirement under Section 107(6) of the CGST Act. The petitioner argued that a pre-deposit was made via challan dated July 9, 2024, and that even if there was a procedural defect, they should have been granted an opportunity to rectify it. The revenue contended that the pre-deposit amount of Rs. 85,661/- was deposited into the petitioner's cash ledger, which does not constitute compliance with the mandatory pre-deposit requirement.

Key Issues

1. Whether the deposit of Rs. 85,661/- into the petitioner's cash ledger, as evidenced by a challan dated July 9, 2024, constitutes compliance with the mandatory pre-deposit requirement under Section 107(6) of the CGST Act, 2017, for the purpose of filing an appeal before the Appellate Authority? 2. Whether the Appellate Authority erred in dismissing the petitioner's appeal on grounds of non-compliance with the pre-deposit requirement without affording the petitioner an opportunity to cure the alleged procedural defect? Petitioner's Arguments: The petitioner contended that the pre-deposit was made and accepted in the impugned order. They argued that even if there was a procedural irregularity in making the deposit, the Appellate Authority should have provided a fresh opportunity to rectify the deficiency, as neither a show cause notice was issued nor was a reasonable opportunity granted to cure the purely procedural defect. They relied on the principles of natural justice and fair play. Revenue's Arguments: The revenue argued that the pre-deposit amount was deposited into the cash ledger, which is an electronic wallet, and this does not amount to compliance with the mandatory pre-deposit requirement under Section 107(6) of the CGST Act, 2017. Therefore, the impugned order of dismissal was not illegal.