The Goods and Services Tax Appellate Tribunal (GSTAT), Court No. I, has refused to admit an appeal challenging a penalty of ₹50,000 imposed under Section 122(3) of the Central Goods and Services Tax (CGST) Act, 2017, holding that the amount determined against the appellant did not exceed the statutory threshold prescribed under Section 112(2) of the Act.
The order was passed by a Bench comprising Jatinder Pal Singh (Judicial Member) and Pradeep Kumar Goel (Technical Member), in the matter concerning Ashwini Malhotra and the Commissioner of Central Tax, Central GST Commissionerate and others. The order was dated 22 September 2026.
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The appellant had approached the GSTAT against an order-in-appeal passed by the Commissioner (Appeals), CGST, Chandigarh.
Under the appellate order, a penalty of ₹25,000 each, aggregating to ₹50,000, had been upheld against the appellant under Section 122(3) of the CGST Act in his capacity as Managing Director of two units of M/s Weikfield Foods Pvt. Ltd., located at Nalagarh, Himachal Pradesh and Pune, Maharashtra.
The Commissioner (Appeals) had also upheld the tax demand and penalty imposed upon M/s Weikfield Foods Pvt. Ltd. However, insofar as the appellant’s individual appeal was concerned, the total amount of tax, input tax credit, fine, fee or penalty determined against him did not exceed ₹50,000.
When the matter came up before GSTAT for admission, the appeal had remained pending because the appellant had not deposited the pre-deposit contemplated under the proviso to Section 112(8) of the CGST Act.
The appellant’s counsel, Sandeep Sachdeva, submitted that no pre-deposit was required in the present case. The appeal involved only a penalty of ₹50,000 and did not involve any tax demand against the appellant.
According to the appellant, the show cause notices had been issued on 30 December 2022, at a time when the statutory requirement of depositing 10% of the penalty for an appeal against a penalty-only order was not in force.
Counsel pointed out that the requirement was introduced into Section 112(8) only with effect from 1 October 2025. Since the proceedings had originated from notices issued in December 2022, it was argued that the amended provision could not be applied retrospectively to the present proceedings.
On this basis, the appellant contended that no 10% pre-deposit on the ₹50,000 penalty was payable and sought removal of the defect so that the appeal could be admitted and heard on merits.
The appellant also relied upon judicial precedents cited in a case compilation filed before the GSTAT.
The authorities relied upon included Reddy Veeranna Constructions Pvt. Ltd. v. Appeal Commissioner & Ors., 2026 (8) TMI 215 – GSTAT Hyderabad; Gaurav Jain & Anr. v. Joint Commissioner (Appeals-II) CGST Delhi Zone & Anr., 2026 (8) TMI 85 – Delhi High Court; and Barjinder Singh Kohli v. Assistant Commissioner of Revenue & Ors., 2025 (11) TMI 294 – Calcutta High Court.
However, the Tribunal ultimately did not decide the pre-deposit issue on merits because it found that the appeal itself could not be admitted in view of the monetary threshold prescribed under Section 112(2).
The Tribunal examined the statutory scheme governing appeals to the Appellate Tribunal.
Section 112(1) provides for an appeal by a person aggrieved by an order passed under Section 107 or Section 108, subject to the prescribed limitation period.
More importantly, the Tribunal referred to Section 112(2), which provides the Appellate Tribunal with discretion to refuse admission of an appeal where the tax or input tax credit involved, or the difference in tax or input tax credit involved, or the amount of fine, fee or penalty determined by the order, does not exceed ₹50,000.
The Bench noted that the appeal was filed by the appellant as a person aggrieved by the Commissioner (Appeals)’ order dated 25 September 2024 passed under Section 107 of the CGST Act.
The Tribunal found that there was no dispute that the amount of tax, input tax credit, fine, fee or penalty determined against the appellant did not exceed ₹50,000.
Consequently, the Bench exercised the discretion specifically conferred upon it by Section 112(2).
GSTAT accordingly refused to admit the appeal and ordered accordingly. The Tribunal therefore did not proceed to adjudicate the appellant’s substantive challenge concerning the penalty or the question of applicability of the amended pre-deposit requirement under Section 112(8).
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