M/S Safal Trading Company vs. Commissioner (Appeals), C G S T And Central Excise

Held

The Court held that compliance with the prescribed pre-deposit requirement under Section 107(6) of the CGST Act, 2017, is mandatory for maintaining an appeal before the Appellate Authority. The Appellate Authority has no discretion to waive or reduce this statutory requirement in the absence of specific power. The Court relied on the strict rule of interpretation applicable to taxing statutes and the Supreme Court's decision in Commissioner of Customs (Import) vs. M/s. Dilip Kumar and Company & Others. The petitioner's inability to deposit the requisite amount does not grant the Appellate Authority the power to waive a statutory condition. Therefore, the Appellate Authority did not commit any illegality in dismissing the appeal for non-compliance with the mandatory pre-deposit. The Court found no grounds to interfere with the impugned order in its writ jurisdiction.

Facts

The petitioner, M/s Safal Trading Company, filed a writ petition challenging an order dated January 15, 2026, passed by the Commissioner (Appeals), CGST and Central Excise. This order dismissed the petitioner's appeal against an earlier order dated December 19, 2024, passed by the Joint Commissioner, CGST and Central Excise. The Joint Commissioner had determined a tax liability of Rs. 3,51,820/- for clandestine removal of goods and imposed a penalty of Rs. 2,06,77,809/- (IGST) and Rs. 3,51,820/- (CGST/SGST). The Appellate Authority dismissed the petitioner's appeal for failing to comply with the mandatory pre-deposit requirement under Section 107(6) of the CGST Act, 2017, as the petitioner was unable to deposit the determined amount.

Key Issues

1. Whether the appeal before the Appellate Authority could be entertained in the absence of the mandatory pre-deposit prescribed under Section 107(6) of the CGST Act, 2017? The petitioner argued that they were unable to deposit the determined amount and therefore prayed for the writ petition to be entertained. The respondents contended that the petitioner had a further statutory remedy before the GST Appellate Tribunal and had failed to exhaust it. They also argued that the petitioner failed to deposit the prescribed percentage of the disputed tax amount, making the dismissal of the appeal by the Appellate Authority for non-compliance with pre-deposit requirements lawful.