The Supreme Court has permitted a construction company to file an appeal before the Goods and Services Tax Appellate Tribunal (GSTAT) without making the statutory pre-deposit, after it argued that both the show-cause notice and the original adjudication order had been issued before the amended pre-deposit requirement came into force.
The Bench of Justice K.V. Viswanathan and Justice Arun Palli issued notice in a special leave petition against the Madhya Pradesh High Court’s decision declining to entertain its writ petition due to the availability of an appellate remedy under Section 112 of the Central Goods and Services Tax Act, 2017.
As an interim measure, the Supreme Court permitted the company to approach the GSTAT and directed that its appeal be entertained without insisting upon a pre-deposit. The relief, however, has expressly been made subject to the final outcome of the special leave petition.
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“Meanwhile, the petitioner is permitted to file an appeal before the GSTAT and the appeal shall be entertained without a pre-deposit,” the Court ordered.
Appearing for the petitioner, counsel submitted that the show-cause notice was issued on July 26, 2024, while the Order-in-Original was passed on October 3, 2024.
The amendment prescribing the disputed pre-deposit condition came into effect only on October 1, 2025, the Court was informed. It was therefore argued that the subsequently introduced requirement could not be imposed as a condition for filing a further appeal before the GSTAT in proceedings initiated and adjudicated before the amendment took effect.
The petitioner also questioned the jurisdiction of the officer who issued the show-cause notice, contending that the notice had not been issued by a “proper officer” authorised under the CGST Act.
After hearing the petitioner and the counsel appearing on advance notice for the tax authorities, the Supreme Court issued notice and granted interim protection from the pre-deposit requirement.
The Court has not yet finally decided whether the amended pre-deposit provision applies to appeals arising from notices and adjudication orders issued before October 1, 2025. That question remains open for consideration in the pending proceedings.
The assessee is engaged in construction, site development and road construction activities and holds a registration under the GST law.
According to the Madhya Pradesh High Court’s judgment, an investigation was initiated against the company on December 2, 2020, over allegations that it was involved in passing on irregular input tax credit without making an actual supply of goods. Its GST registration was subsequently cancelled on March 24, 2021.
A show-cause notice dated July 26, 2024, was issued proposing the imposition of penalties under Section 122 of the CGST Act, read with Section 20 of the Integrated Goods and Services Tax Act, 2017. The proceedings concerned the financial years 2017-18 and 2018-19.
An Order-in-Original was passed on October 3, 2024, imposing penalties upon the company. Assessee challenged the adjudication order before the Appellate Authority under Section 107 of the CGST Act.
The Appellate Authority dismissed the first appeal on October 21, 2025, on the ground of limitation. The company then approached the Madhya Pradesh High Court seeking the quashing of the show-cause notice, the Order-in-Original and the appellate order.
In the alternative, it requested the High Court to declare that the mandatory pre-deposit provision governing appeals under Section 112 could not be applied retrospectively to its case.
Apart from the pre-deposit issue, the petitioner challenged the authority of the Directorate General of GST Intelligence officer to initiate penalty proceedings against it under Section 122 of the CGST Act.
The company relied on an October 27, 2025 circular assigning the functions of a proper officer to the concerned departmental officers. It maintained that the subsequent assignment could not retrospectively validate a show-cause notice issued in July 2024 or the adjudication order passed in October 2024.
It further contended that Circular No. 31/05/2018-GST authorised DGGI officers to issue notices under Sections 73 and 74 of the CGST Act but did not confer jurisdiction upon them to independently issue the impugned penalty notice under Section 122.
The tax authorities opposed the petition and defended the validity of the proceedings and the orders passed against the company.
The Madhya Pradesh High Court had dismissed assessee ’s writ petition holding that the company had an effective appellate remedy before the GSTAT under Section 112 of the CGST Act.
The Division Bench of Acting Chief Justice Vivek Rusia and Justice Pradeep Mittal noted that presiding officers had been appointed to the GST Tribunals and had been directed to join their respective Benches. It also referred to the government’s decision to provide time for filing appeals after the commencement of the Tribunal’s filing mechanism.
The High Court observed that questions concerning alleged violations of natural justice and whether the officer issuing the notice was a proper officer involved factual and documentary examination. According to the Court, such questions were required to be considered by the GSTAT.
It further declined to exercise its writ jurisdiction merely to enable the petitioner to avoid the statutory pre-deposit requirement.
The High Court reasoned that once the legislation had created a specialised tribunal consisting of judicial and technical members to adjudicate GST disputes, parties should ordinarily be relegated to that appellate forum. Entertaining every such dispute directly under Article 226 of the Constitution would undermine the purpose behind establishing the GSTAT, it observed.
Consequently, the writ petition was dismissed with liberty to the assessee to avail itself of the appellate remedy under Section 112.
The Supreme Court’s interim order modifies the immediate practical effect of the High Court’s ruling by allowing the company to pursue its statutory appeal without first making the disputed pre-deposit.
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