TaxTMI 
TaxTMI 
As 31/07/2026 is the last date for the second appeal for all legacy cases where OIA is dated up to 30/04/2026, it is crucial to have in depth analysis on compliance of this clause b which is on pre-deposit for GSTAT Appeals. This clause reads with effect from 01/11/2024 as ' a sum equal to ten per cent of the remaining amount of tax in dispute, in addition to the amount paid under sub-section 6 of section 107, arising from the said order subject to a maximum of twenty crore rupees in relation to which the appeal has been filed'.
It is imperative on our part to understand fully the implications of the entire clause b by reading the same holistically so as to arrive at the right interpretation. I am surprised to get a view from one of the readers of my article stating that the words in addition to the amount paid under sub-section 6 of section 107 is violated when no fresh deposit is made before the filing of the second appeal. This aspect requires further deliberations and that is the trigger for this article.
Let us first analysis the case of the Ashirwad Food Industries decided on 09/02/2026 by the division bench of the Jharkhand High Court as reported in M/s. Ashirwad Food Industries Versus Union of India, through the Commissioner, CGST & Central Excise, Ranchi, Additional Commissioner, CGST & Central Excise, Ranchi, Additional Commissioner (Audit), CGST & Central Excise, Ranchi. - 2026 (2) TMI 596 - JHARKHAND HIGH COURT. In this case, the first appellate authority has substantially reduced the demand amount in OIO.
S No | Description | Amount involved |
1 | OIO dated 04/02/2025 demand | 2,38,00,000 |
2 | Pre-deposit under 107 (6) | 23,80,000 |
3 | OIA dated 30/06/2025 demand reduced to | 40,00,000 |
4 | Pre Deposit required for GSTAT appeal | 8,00,000 |
5 | Available pre deposit | 23,80,000 |
6 | HIGH COURT version on pre deposit (additional) | NIL |
The same view has been fully endorsed by the division bench of the GSTAT, Cuttack on 08/07/2026 in the matter of Manoranjan Dash Versus Commissioner, Odisha, Commissionerate Of CT GST & Ors. - 2026 (7) TMI 829 - GSTAT CUTTACK. Based on the findings in the above two referred cases, an article was published in taxtmi.com on 17/07/2026 as 'All about pre deposit in GST law- take away from GSTAT Cuttack'. Now a new issue is raised by one of the learned readers that clause b of sub section 8 of section 112 requires 10% of the amount as determined in OIA as additional pre deposit which must be over and above the first pre deposit of 10 % on OIO demand. The reader places his arguments on the words ' in addition to the amount paid under sub section 6 of sub section 107'. He arrives at a narrow interpretation to state that irrespective of the quantum of the first pre deposit, a second pre deposit of 10 % of demand as per first appellate authority is required for second appeal before GSTAT.
The above article was written based on the views of the Jharkhand high court as well as the Cuttack bench of the GSTAT. Hence, an attempt is now made to further elaborate this discussion by way of additional simple examples.Rs in Lakhs
Description | Case 1 | Case2 | Case 3 | Case 4 | Case 5 | Case 6 | Case 7 |
Demand OIO | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 |
Relief in OIA | 100.00 | 90.00 | 70.00 | 50.00 | 30.00 | 10.00 | 0.00 |
Demand as per OIA | 0.00 | 10.00 | 30.00 | 50.00 | 70.00 | 90.00 | 100.00 |
20% of OIA | 0.00 | 2.00 | 6.00 | 10.00 | 14.00 | 18.00 | 20.00 |
Available pre deposit | 10.00 | 10.00 | 10.00 | 10.00 | 10.00 | 10.00 | 10.00 |
Pre deposit for GSTAT | 0.00 | 0.00 | 0.00 | 0.00 | 4.00 | 8.00 | 10.00 |
Required pre deposit as per friend advice | NA | 1.00 | 3.00 | 5.00 | 7.00 | 9.00 | 10.00 |
Case 1: Taxpayer is happy whereas department may approach GSTAT.
Case 2: The entire demand being disputed is available as pre deposit.
Case 3: 33.33 % available as against 20
Case 4: Exactly 20% already available as pre deposit
Case 5, 6 as well as 7: Available pre deposit is in short than 20%
In case my friend's view is endorsed by any GSTAT bench at a later date, the requirement to pay the second pre deposit would be much higher than 20% of the demand as confirmed in the first appeal. I am of the view that this could not be the intention of law.
In simplest terms, it may be stated that for first appeal the required pre deposit is 10% of the disputed tax demand as per OIO. For second appeal, the required pre deposit is 20% (including the first pre deposit) of the disputed tax amount as per OIA. One may stop at this stage as this view is already endorsed by Jharkhand High Court as well as the Cuttack bench of the GSTAT. Let us wait for more clarity in the days to come. In order to avoid any misunderstanding of clause b of sub section 8 of section 112, CBIC may immediately issue necessary clarifications to address the issue of insistence of exorbitant pre deposits from the taxpayer by adapting a view that second pre deposit is 10% of disputed tax amount as per OIA, when 100% or even more amount is already available as pre deposit at first level.
Tax professionals as well as taxpayers may safely pay a pre deposit of only 20% of the disputed tax amount as per the order of the first appellate authority which must include the first appeal pre deposit amount in full.