Pre-Deposit For GST Appeal To Be Governed By Law Existing On SCN Date: Delhi High Court

The Delhi High Court has held that the requirement of pre-deposit for filing an appeal under the Central Goods and Services Tax (CGST) Act would be governed by the statutory provision in force on the date of issuance of the show cause notice (SCN).

The Division Bench of Justices Anil Kshetarpal and Bharat Parashar made the observation while dealing with a petition challenging a GST adjudication order concerning allegations that Petitioner had created and controlled 13 firms through which input tax credit (ITC) of over ₹30.50 crore was allegedly passed on.

The SCN in the case was issued on July 26, 2024, while the amended provisions relating to pre-deposit under Sections 107(6) and 112(8) of the CGST Act came into effect from October 1, 2025.

Petitioner argued that the amended provisions could not retrospectively apply to proceedings arising from an earlier SCN.

The Court noted that Petitioner had an alternative statutory remedy of appeal against the January 31, 2025 adjudication order. It thus declined to examine the challenge to the findings in the adjudication order in writ jurisdiction, observing that doing so would require an examination of the facts and merits of the adjudication.

However, on the question of pre-deposit, the Court relied upon its earlier judgment in Gaurav Jain & Anr. v. Joint Commissioner (Appeals-II), CGST Delhi Zone & Anr. and noted that the SCN in the present case had been issued before October 1, 2025.

The Court also recorded that the adjudication order, insofar as the petitioner was concerned, imposed only a penalty and did not raise any demand of tax against him.

It consequently held, “the appellate remedy available to the Petitioner would be governed by Section 107(6) of the CGST Act as it stood on the date of issuance of the Show Cause Notice.”

As such, the Court the Appellate Authority to consider Petitioner's appeal, if he prefers it, without insisting upon deposit of 10% of the disputed penalty under the substituted proviso to Section 107(6).

For Petitioner: Advocates Rakesh Prasad Singh, Rahul Ranjan, and Aman Sinha.