The Supreme Court has dismissed an appeal filed by the Department in a GST penalty dispute, holding that the matter falls below the monetary threshold prescribed by the Central Board of Indirect Taxes and Customs (CBIC) for pursuing cases before the apex court.

The case arose from a dispute over penalty imposed on an assessee for shortage in quantity of goods during transportation. The Calcutta High Court had earlier set aside the order of the appellate authority which levied penalty on the entire consignment, instead directing that the authority should recompute penalty only in respect of the shortage, at the rate of 200%, and refund the excess penalty already remitted within eight weeks.

Challenging this decision, the Revenue approached the Supreme Court. However, during the proceedings, the respondent relied on CBIC Circular No. 207/1/2024-GST dated 26 June 2024, which bars the department from filing or pursuing appeals in cases where the monetary impact is less than ₹2 crore. The penalty in dispute was approximately ₹13 lakh, far below this limit.

The Revenue argued that the case might fall under the exceptions listed in Paragraph 4(iv) of the circular, which cover recurring issues or interpretation of GST provisions such as classification, valuation, refunds, or place of supply.

The Bench of Justice Manoj Misra and Justice Vipul M. Pancholi observed that the High Court’s order did not involve any recurring issue or interpretation of law but was confined to recomputation of penalty in a particular transaction. Hence, it did not fall within the exempted categories.

The Court thus declined to entertain the appeal, disposing of the matter strictly in terms of the CBIC circular.

Case Details

Case Title: The Assistant Commissioner Of Revenue & Ors. Versus Usha Gupta

Case No.: Civil Appeal Nos.4533-4534/2023

Date: 24/09/2025

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