No Double Pre-Deposit For Same Tax Demand; Second Appeal Cannot Be Conditioned On Fresh Payment: Delhi High Court
The Delhi High Court has held that when a taxpayer has already deposited the mandatory 10% pre-deposit for the same disputed tax amount before the State GST Appellate Authority, the Central GST authorities cannot insist on another separate pre-deposit for the same amount while filing a second appeal. The Bench stated that the law does not permit duplication of pre-deposit for the same...
The Delhi High Court has held that when a taxpayer has already deposited the mandatory 10% pre-deposit for the same disputed tax amount before the State GST Appellate Authority, the Central GST authorities cannot insist on another separate pre-deposit for the same amount while filing a second appeal.
The Bench stated that the law does not permit duplication of pre-deposit for the same tax demand, and therefore the taxpayer should be allowed to file an appeal without paying again.
A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain was hearing a writ petition filed by the assessee, challenging the Order-in-Original raising a demand of ₹56,50,646 along with equal penalty.
The assessee, Vaneeta Impex Pvt. Ltd. submitted that an earlier demand on the exact same figures and transactions had already been raised by the Delhi State GST (DGST) Department, and an appeal was already pending before the State Appellate Authority, wherein the assessee had already deposited the 10% mandatory pre-deposit.
The assessee argued that since the two demands were based on the same transactions with the same vendor, a second demand and second pre-deposit violate Section 6(2)(b) of the CGST Act, which bars parallel proceedings for the same matter. The assessee placed reliance on the Supreme Court's ruling in Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate.
Per Section 6(2) of CGST Act, once either CGST or SGST authority has taken up a case for action, the other authority cannot reopen the same issue again for the same period and same subject matter.
The Revenue argued that although the transactions were common, the nature of the allegations was different, stating that DGST had raised demand after scrutiny of returns under Section 73, while CGST had issued notice under Section 74 on allegations of fraudulent Input Tax Credit (ITC).
The High Court remarked that both demands related to the same amount of ITC from the same cancelled dealer, and since the taxpayer has already deposited 10% of the disputed amount, a second pre-deposit cannot be insisted upon.
In view of the above, the Bench allowed the writ petition in favour of the assessee, holding that the taxpayer can file an appeal against the CGST demand without paying any further pre-deposit.
Case Title: Vaneeta Impex Private Limited Vs. Union of India & Ors.
Case No: W.P.(C) 15169/2025 & CM APPL.62228/2025
Appearance for the Petitioner/assessee: Mr. R.S. Yadav and Mr. Vishal
Kashyap, Advs.
Appearance for the Respondent: Mr. Akarsh Srivastava, SSC, CBIC.
Mr. Sumit K Batra, Adv