Can Companies In Liquidation Seek Exemption From GST Pre-Deposit To File Appeals? Delhi High Court To Examine

The Delhi High Court will examine whether companies undergoing liquidation can seek exemption from the mandatory pre-deposit requirement under Section 107(6) of the Central Goods and Services Tax (CGST) Act.

The issue is whether the requirement can be relaxed in view of the statutory distribution mechanism under the Insolvency and Bankruptcy Code (IBC).

A Division Bench of Justices Anil Kshetarpal and Bharat Parashar requested Additional Solicitor General of India Raghavendra Shankar to assist the Court in examining the interplay between Section 107(6) of the CGST Act and the IBC, including whether the liquidation framework under Section 53 of the IBC affects the statutory pre deposit requirement.

The writ petition filed by Moser Baer India Limited through its liquidator Anil Kohli, has challenged the insistence on pre deposit for an appeal against a September 23, 2025 order confirming a substantial GST demand and penalty. The company is undergoing liquidation pursuant to an order passed by the National Company Law Tribunal, New Delhi on September 20, 2018.

Before the High Court, The company contended that its realised assets must be distributed according to the statutory waterfall mechanism under Section 53 of the IBC.

It argued that requiring the liquidator to deposit funds against a disputed tax liability would divert money from the liquidation estate and grant preferential treatment to the tax authorities. Notices dated March 16 and April 9, 2026, had required the company to make the pre deposit, failing which its appeal would be treated as not filed.

The Court observed that the issue merits consideration because the disputed tax liability has not attained finality in appellate proceedings.

It therefore listed the matter on November 28, 2026 for further hearing.

For Petitioner: Advocates Abhishek Anand, Karan Kohli, Palak Kalra & Aney Verma

For Respondent: Atul Tripathi, SSC