TaxTMI 
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TaxTMI 
Appeals under GST Act
Section 107 of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) provides the procedure for filing appeal before the First Appellate Authority against the orders of the Authority lower to the Commissioner (Appeals) within 3 months from the date of communication of the order.
Section 112 of the Act provides the procedure for filing appeal before the Goods and Services Tax Appellate Tribunal against the order passed by the First Appellate Authority within 3 months from the date of communication of the order.
Pre-Deposit
Section 107(6) of the Act provides for filing an appeal before the First Appellate Authority the appellant is to pay pre-deposit as detailed below-
- in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and
- a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum ofRs. 20 crores in relation to which the appeal has been filed.
In case of any order demanding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to 10% of the said penalty has been paid by the appellant.
Section 112(8) of the Act provides that for filing an appeal before the Appellate Tribunal, the appellant is required to pay pre-deposit as detailed below-
- in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and
- a sum equal to10% of the remaining amount of tax in dispute, in addition to the amount paid under Section 107(6) of the Act arising from the said order subject to a maximum of Rs. 20 crores, in relation to which the appeal has been filed.
In case of any order demanding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to ten per cent. of the said penalty, in addition to the amount payable under the proviso to Section 107(6) of the Act has been paid by the appellant.
Failure to pay pre-deposit
In ‘I-Karb E-Solution Private Limited v. Joint Commissioner of State Tax, Behala Charge’- 2025 (6) TMI 1002 - CALCUTTA HIGH COURT, the petitioner, being aggrieved against the order of the Adjudicating Authority filed an appeal before the First Appellate Authority. The assessee did not pay the pre-deposit which is mandatorily required to be complied with while filing an appeal before the First Authority. The non-payment of pre-deposit is due to the financial crunch and liabilities. The assessee prayed the Appellate Authority to entertain the appeal without payment of the required pre-deposit. The Appellate Authority refused to entertain the appeal because of non-payment of pre-deposit mandatorily required to pay under Section 107(2) of the Act.
Against the said order the assessee filed a writ petition before the High Court challenging the order of the First Appellate Authority. The High Court held that if the assessee did not comply with the payment of mandatory pre-deposit, there was no scope for the Appellate Authority to entertain the Appeal. The assessee had not been able to make out any special case for entertaining the present writ petition. Therefore the High Court dismissed the writ petition.
Pre-deposit through electronic credit ledger
In ‘Navanit Motors Private Limited v. Commissioner of CGST & Central Excise, (Appeals – III), Mumbai’- 2025 (7) TMI 1130 - BOMBAY HIGH COURT, the petitioner filed an appeal against an order of Adjudicating Authority, before the Commissioner (Appeals). The appeal was dismissed by the Appellate Authority on the ground that the pre deposit was paid by using the balance in the electronic credit ledger. The Appellate Authority held that it was not permitted to pay pre deposit by using the electronic credit ledger. This did not meet the requirements of Section 107(6) of the Act.
The writ petitioner filed the present writ petition against the order of Commissioner (Appeals) since the Appellate Tribunal has not yet constituted. The petitioner contended that the no notice was given to the petitioner by the Department and the petitioner was not given an opportunity of being heard which is against to the principles of Natural Justice. The Revenue contended the following before the High Court-
- In terms of Section 49(4) the amount available in electronic credit ledger can only be used for making payment towards the output tax subject to conditions and restrictions as may be prescribed.
- A pre deposit for maintainability of an appeal can hardly be said as any liability of tax.
- The utilisation of input tax credit in the electronic credit ledger cannot be regarded as discharging any liability in accordance with the provisions of Section 49(2) of the Act.
The High Court heard the parties to the writ petition. The High Court held that the Appellate Authority made the impugned order without giving a notice to the petitioner about the proposal to non-suit petitioner on the ground of alleged non-compliance with the provisions of Section 107(6) of the Act, concerning pre-deposit.
The High Court relied on the judgment of its own order in ‘Oasis Realty v. Union of India’ - 2022 (10) TMI 42 - BOMBAY HIGH COURT in which the High Court held that the input tax credit can be taken for making the pre-deposit. In case of non-payment of pre-deposit the Appellate Authority was expected to put the petitioner on notice. This was not done by the Appellate Authority, which is in violation of the Principles of Natural Justice. On this ground the High Court set aside the impugned order.
The High Court observed that the judgment in ‘Oasis Realty’ case is binding on the Appellate Authority. The Appellate Authority just ignored the binding precedents of the Higher Court. The High Court allowed the writ petition and set aside the impugned order.
In ‘National Fertilisers Limited v. Principal Commissioner of CGST and Central Excise, Lucknow’ – 2025 (4) TMI 560 - ALLAHABAD HIGH COURT, the petitioner filed an appeal before the First Appellate Authority after depositing the required pre-deposit through electronic credit ledger. The said appeal was dismissed by the Appellate Authority as he was of the view that the deposit made by the petitioner through Electronic Credit Ledger is not valid. The petitioner challenged the said order by filing a writ petition before the High Court. The petitioner contended before the High Court that the at the time of filing appeal no objection with regard to non deposit of the amount was ever raised and no issue was raised that the deposit through electronic credit ledger is not valid. Therefore the petitioner contended that the order is in violation of the principles of Natural Justice. The High Court observed that the assessee should have been confronted with same before passing of the impugned order. The High Court quashed the impugned order and remanded the matter to the Adjudicating Authority to decide the case afresh.
Short fall of pre deposit
In ‘O.C. Infra ventures and Construction Private Limited v. Joint Commissioner (Appeals), Customs, CGST and Central Excise, Lucknow – 2025 (9) TMI 463 - ALLAHABAD HIGH COURT– High Court, Allahabad, decided on 02.09.2025, the writ petitioner filed the present writ petition challenging the order of the Adjudicating Authority dated 22.04.2025. The same was dismissed by the High Court. The High Court found that the pre-deposit paid by the appellant is Rs.15,889/-through Electronic Credit Ledger which was the below the amount prescribed under the Act. The writ petition was dismissed on the ground that the appeal is found to be filed without fulfilling the condition of pre-deposit, which is mandatory in terms of Section 107(6) of the Act.
The Department contended that if the deposit is not found in accordance with law the assessee ought to have been confronted with the same through shortcoming and give an opportunity to rectify the said error.
The High Court found that no opportunity was given to the writ petitioner by the Department to rectify the error even if the appellate authority was of the view that the deposit is not in accordance with law. The High Court remanded the matter to the appellate authority with a direction to decide the appeal in accordance with law and to accept the amount paid through the electronic credit ledger as a valid deposit for preferring an appeal. If there is any short fall in terms of Section 107(6) the petitioner shall make the balance payment so as to make the same within the quantum as prescribed under Section 107(6) of the Act.