TaxTMI 
TaxTMI 
03 Oct 2026 
A Recall Application Tests the Meaning of "In Addition To"
The pre-deposit required for a GST appeal is ordinarily calculated as a prescribed percentage of the tax remaining in dispute. Difficulty arises when the First Appellate Authority substantially reduces the original demand, but the taxpayer has already deposited an amount calculated on the much higher original demand. Must the taxpayer still make a fresh deposit before the GST Appellate Tribunal merely because Section 112(8)(b) uses the words "in addition to the amount paid" under Section 107(6)?
This question arose in Manoranjan Dash Versus Commissionerate Of CT GST, Premananda. Naik-01. - 2026 (9) TMI 1651 - GSTAT CUTTACK. The GSTAT, Cuttack Bench, comprising Hon'ble Suchismita Misra, Member (Judicial), and Hon'ble Ranjan Kumar Sahoo, Member (Technical), passed the order in Interim Application No. 2/CTT/2026 arising from Appeal No. 10/CTT/2026. The Department sought the recall or modification of an earlier order dated 08.07.2026, under which the appeal had been admitted without requiring any further pre-deposit under Section 112(8)(b).
The Department maintained that the earlier order had been passed without affording it an opportunity of hearing and that the expression "in addition to" required a separate deposit at the Tribunal stage. After hearing the Department and reconsidering the statutory provisions, the Tribunal found no ground to modify its earlier order. Accordingly, the Tribunal disposed of the interim application without disturbing the admission of the appeal.
The Reduced Demand Completely Changed the Calculation
The original proceedings arose from an allegation of excess availment of input tax credit under Section 73. The adjudicating authority confirmed disputed tax of Rs.11,34,474, apart from interest and penalty. While filing the first appeal under Section 107, the appellant deposited Rs.1,13,448, representing approximately 10% of the original disputed tax.
The First Appellate Authority granted substantial relief and reduced the tax demand to Rs.1,02,012. The surviving interest and penalty were correspondingly reduced. The appellant then approached the Tribunal against the remaining portion of the demand. By this stage, the deposit of Rs.1,13,448 already made under Section 107(6) exceeded not merely 10% or even 20% of the reduced disputed tax; it exceeded the entire surviving tax demand of Rs.1,02,012.
This numerical position was decisive. Ten per cent of the surviving tax would be approximately Rs.10,201, while the combined percentage ordinarily represented by the deposits at the two appellate stages would be approximately Rs.20,402. Against both figures, the appellant had already deposited Rs.1,13,448. Insisting upon another deposit would therefore have required the appellant to block funds even though the amount already held by the Government exceeded the whole tax remaining in dispute.
Two Appellate Stages Do Not Create Two Independent Tax Liabilities
Section 107(6) of the CGST Act, 2017 requires an appellant to pay the admitted tax, interest, fine, fee and penalty in full and to deposit the prescribed(10%) percentage of the remaining disputed tax before filing the first appeal. Section 112(8) similarly requires payment of the admitted amount and a further prescribed (10%) percentage of the remaining tax in dispute, in addition to the amount paid under Section 107(6), before an appeal is filed before the Tribunal.
Ordinarily, these provisions operate cumulatively. Where the original tax demand remains unchanged after the first appeal, the taxpayer cannot rely on the deposit made under Section 107(6) as a complete answer to the further deposit required under Section 112(8). In such a case, the deposit at the Tribunal stage is payable in addition to the amount deposited at the first appellate stage.
The present case involved a materially different situation. The deposit made under Section 107(6) was not a payment towards a separate liability. It represented a prescribed portion of the same disputed tax, which was subsequently drastically reduced. Once the demand was reduced, the adequacy of the amount already deposited had to be examined with reference to the tax actually surviving before the Tribunal. Two successive appellate provisions could not be interpreted as creating two unrelated financial liabilities detached from the same underlying tax dispute.
The Department's Acceptance of Appellate Relief Fixed the Surviving Dispute
The First Appellate Authority's order replaced the original demand to the extent of the relief granted. Once the tax demand was reduced from Rs.11,34,474 to Rs.1,02,012, the latter amount became the tax in dispute in the taxpayer's appeal before the Tribunal. The original figure could no longer be used as if the first appellate order had made no difference.
The Department expressly stated in its interim application that it did not seek to reopen, modify or disturb any other finding or relief granted in favour of the appellant. It confined its challenge to the interpretation of Section 112(8)(b) and the adjustment of the earlier pre-deposit. In other words, the Department accepted the reduction of the substantive demand and did not file an appeal seeking restoration of the amount reduced by the First Appellate Authority.
This limitation was crucial. After accepting the reduction, the Department could not calculate the Tribunal-stage requirement in a manner that ignored the financial effect of that very relief. The surviving tax demand had to be taken as it stood under the first appellate order. Since the earlier deposit exceeded that entire amount, the revenue was already secured beyond the level contemplated by the statutory percentage.
"In Addition To" Cannot Be Applied Without Identifying the Tax in Dispute
The Department placed considerable reliance on the expression "in addition to the amount paid under sub-section (6) of Section 107." Read in isolation, these words appear to require a fresh 10% deposit in every Tribunal appeal, irrespective of the amount already lying with the Government. The Department therefore argued that the amount paid under Section 107(6) could not be adjusted against the requirement under Section 112(8)(b).
However, the expression forms part of a provision that calculates the deposit as a percentage of the "remaining amount of tax in dispute arising from the said order." The order under challenge before the Tribunal was that of the First Appellate Authority, not the original adjudication order in its unmodified form. Consequently, the tax in dispute had to be identified after giving effect to the appellate relief.
A statutory phrase must be applied to the factual situation it governs. Where the demand remains intact, an additional deposit operates in the ordinary manner. Where the demand has been substantially reduced and the earlier deposit already exceeds the aggregate percentage of the surviving disputed tax, mechanical insistence on another payment produces an anomalous result. The statute secures a percentage of disputed tax; it does not require collection of an amount unrelated to the dispute that actually survives.
Strict Construction Does Not Require an Unworkable Result
The Department relied on Commissioner of Income Tax – III Versus M/s. Calcutta Knitwears, Ludhiana - 2014 (4) TMI 33 - Supreme Court, to argue that a taxing statute must be strictly construed, even if a literal interpretation causes hardship or inconvenience. It also relied on Abhijit Nayak Versus The Commissioner of (CT & GST), Odisha and others. - 2025 (12) TMI 84 - ORISSA HIGH COURT, which required compliance with the mandatory pre-deposit under Section 112(8) before pursuing the statutory appeal.
Neither authority governed the peculiar factual situation in Manoranjan Dash. Abhijit Nayak concerned an attempt to pursue a remedy without complying with the statutory condition merely because the Tribunal had previously not been functional. It did not involve an earlier deposit exceeding the entire tax demand that survived after the first appeal. The principle that pre-deposit is mandatory was therefore not in dispute; the question was whether that mandatory requirement had already been more than satisfied.
Similarly, strict construction did not require reading the words "in addition to" in isolation from "tax in dispute." The Tribunal was not dispensing with a statutory condition on hardship grounds. It was determining whether the condition remained unsatisfied after taking into account the amount already deposited against the same demand. Treating an existing deposit exceeding the entire surviving tax as legally irrelevant would convert pre-deposit from a percentage-based safeguard into an independent levy unsupported by the provision.
Ashirwad Food Industries Supplied the Direct Parallel
The reasoning finds direct support 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 that case, the First Appellate Authority reduced the original demand of approximately Rs.2.38 crore to about Rs.40 lakh. The taxpayer had already deposited Rs.23,85,182 at the first appellate stage, whereas even 20% of the reduced demand would have been approximately Rs.8 lakh.
The Department had not displaced the relief granted by the First Appellate Authority. Therefore, the reduced demand represented the operative dispute for the proposed Tribunal appeal. Since the amount already deposited substantially exceeded the cumulative percentage calculated on that reduced demand, the High Court directed that the appeal be entertained without insisting upon any further pre-deposit.
The factual similarity was unmistakable. In both cases, the Department accepted the reduction of the original demand; the taxpayer's earlier deposit was calculated on a much higher figure; and that deposit exceeded the amount required with reference to the surviving dispute. The Tribunal therefore reaffirmed that Ashirwad Food Industries squarely applied and carried persuasive value in interpreting the same central legislation.
Prior Payment Is Relevant Because Pre-Deposit Is Security, Not a Fresh Levy
The Tribunal illustrated the problem through a simple example. If a taxpayer pays the entire disputed tax under protest and then files an appeal, it would be unworkable to insist upon an additional percentage merely because the appellate provision refers to pre-deposit. Once the whole disputed amount is already with the Government, the revenue stands more than adequately secured.
The same principle applies with greater force in the present case. The amount deposited at the first appellate stage was higher than the entire tax remaining in dispute. Ignoring it would have resulted in the Government retaining more than 100% of the surviving tax and still demanding an additional amount as a condition for hearing the appeal. That result would bear no reasonable relationship to the purpose of pre-deposit.
The ruling does not permit every taxpayer to avoid the further deposit under Section 112(8). The appellant must establish the amount previously deposited, the tax surviving after the first appeal, and the aggregate statutory requirement applicable to that surviving tax. A further deposit remains payable if the earlier amount is insufficient. Relief arises only to the extent that the existing deposit equals or exceeds the amount required.
Court Fee Compliance Remains a Separate Requirement
The earlier scrutiny of the appeal disclosed two defects: underpayment of the prescribed Tribunal fee and non-payment of a further amount under Section 112(8)(b). The appellant agreed to make up the deficient fee, and the Registry admitted the appeal after reporting that the requisite fee had been paid and that the earlier pre-deposit exceeded the applicable requirement.
This distinction is important for appellate practice. Satisfaction of the pre-deposit condition does not automatically cure a deficiency in court or Tribunal fees. The two requirements arise independently and must be verified separately. Taxpayers relying on an earlier deposit should therefore preserve the challan, appeal acknowledgement, electronic liability records, and the first appellate order establishing the reduced demand.
The present order concerns only the admission of the appeal and compliance with the pre-deposit requirement. It does not decide the substantive dispute regarding input tax credit. Those issues remain to be adjudicated on the merits in the main appeal.
"In Addition To" Cannot Mean Payment Beyond the Tax in Dispute.
The decision preserves both the mandatory character and the practical purpose of pre-deposit. Sections 107(6) and 112(8) must ordinarily be complied with at their respective appellate stages. However, compliance must be measured against the tax actually remaining in dispute and the amount already deposited against that very liability.
Where the First Appellate Authority reduces the demand, and the Department does not challenge that relief, the reduced figure becomes the operative tax dispute before the Tribunal. If the amount already deposited equals or exceeds the aggregate prescribed percentage of that surviving tax, the statutory purpose is fulfilled. If it exceeds the entire surviving tax, insisting on another deposit becomes even more difficult to justify.
By declining to modify its earlier order, the Tribunal affirmed a practical and legally coherent principle: the words "in addition to" ordinarily require a further deposit, but they cannot compel duplicate security once the earlier deposit has already fully covered the surviving tax dispute.
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