S.107(6) Of CGST Act Does Not Grant Discretion To Court For Waiving Pre-Deposit At Time Of Filing Appeal: Delhi High Court

In terms of Section 107(6), insofar as the admitted tax, interest or penalty is concerned, the entire amount would have to be deposited. In so far as the disputed amount is concerned, 10% of the tax would have to be deposited as a pre-deposit along with the appeal.

In the case at hand, Petitioner had sought exemption from the pre-deposit requirements on the ground that it already has to recover more than Rs. 6.4 crores from Government Departments.

The dispute arose after the Respondent Department issued a SCN to the Petitioner alleging wrongful availment of Input Tax Credit.

Petitioner claimed that there were some mistakes in the Returns filed, at the time when the transition took place into the GST regime and due to such mistakes on part of the accountant, wrong turnover was mentioned, though alleged ITC was never availed.

As the Petitioner sought to approach the Appellate Authority, it contended that some securities to the tune of Rs.4 crores are also lying with Government Departments and hence it may be exempted from making a pre-deposit.

At the outset, the High Court observed that Section 107(6) “ does not give discretion for waiver of the pre-deposit.”

The division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta relied on Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, Dehradun & Anr. where, in the context of the Excise Act, the Court had held that every appeal, before the CESTAT, filed after the amendment of Section 35F/129E (in the year 2014) would be maintainable only if mandatory pre-deposit were made.

As such, the Court refused to entertain the prayer for waiver of pre-deposit but granted liberty to the Petitioner to make an appropriate prayer before the concerned Appellate Authority if it wishes to rely upon any amount lying with the Government entities.

Appearance: Mr. Pranay Jain, Adv for Petitioner; Mr. Ruchesh Sinha, Adv. for R-1

Case title: M/S Impressive Data Services Private Limited v. Commissioner (Appeals-I), Central Tax Gst, Delhi

Citation: 2025 LiveLaw (Del) 466

Case no.: W.P.(C) 4662/2025

Click here to read order