The Delhi High Court has directed the GST appellate authority to consider an appeal without insisting on a deposit of 10% of the disputed penalty under the amended Section 107(6) of the Central Goods and Services Tax Act, 2017. The direction applies to a case in which the show cause notice was issued before the amendment took effect on October 1, 2025.
The bench of Justice Anil Kshetarpal and Justice Bharat Parashar has observed that the assessee’s appellate remedy would be governed by Section 107(6) as it stood when the show cause notice was issued on July 26, 2024. The order under challenge imposed a penalty on the petitioner but raised no tax demand against him.
BUY NOW: E-Magazine: 1000+ Landmark GST Judgments (2017–2026)
The case arose from a GST adjudication order dated January 31, 2025. According to the allegations recorded by the Court, the petitioner created and controlled 13 firms through which input tax credit of ₹30,50,13,190 was allegedly passed on. The adjudicating authority passed a common order concerning 81 noticees.
These are allegations in the proceedings, not findings made by the High Court on the merits of the alleged ITC transactions.
The petitioner challenged both the adjudication order and the July 2024 show cause notice. He argued, among other things, that the adjudication order did not adequately address his submissions and that the notice was without jurisdiction. He also sought a declaration that the amended pre-deposit provisions could not apply retrospectively to proceedings initiated before October 1, 2025, or, alternatively, a waiver of the pre-deposit for his appeal.
The petitioner described the adjudication order as non-speaking. The High Court noted, however, that the order ran to more than 300 pages and contained findings concerning the role attributed to the petitioner.
Deciding whether those findings adequately dealt with his objections would require an examination of the facts and merits, the Bench said. Since an appeal against the adjudication order was available under Section 107 of the CGST Act, the Court declined to undertake that exercise in writ proceedings.
On the pre-deposit issue, the Bench applied its earlier ruling in Gaurav Jain & Anr. v. Joint Commissioner (Appeals-II), CGST Delhi Zone & Anr. It noted two decisive facts: the show cause notice preceded October 1, 2025, and the order imposed only a penalty on the petitioner, with no tax demand against him.
The Court therefore directed that, if the petitioner files an appeal within two weeks of September 21, 2026, the appellate authority must consider it in accordance with law without insisting on a deposit of 10% of the disputed penalty under the substituted proviso to Section 107(6).
The High Court disposed of the writ petition and pending applications. It did not set aside the adjudication order or decide whether the alleged ITC transactions were wrongful; those issues remain for the statutory appellate process.
Membership Required to Access Case Details & Order Copy
To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.
