An Excess First-Appeal Deposit Can Satisfy the GSTAT Pre-Deposit Requirement

Pre-Deposit Compliance Depends on the Eligible Amount Already Paid

As GSTAT filing, scrutiny, and hearings have become operational, reported decisions have repeatedly addressed pre-deposit objections before appeals reach their merits. One recurring question is whether a taxpayer must make a fresh payment for a Tribunal appeal when the Revenue already holds a substantial deposit made at the first appellate stage. This becomes particularly important when the first appellate order changes the demand. The proper inquiry is whether an eligible earlier deposit covers the prescribed requirement, not merely whether the taxpayer has generated a new challan. The payment must be verified, linked to the relevant demand, and amount available for adjustment.

This question arose in LTM LIMITED Versus COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI SOUTH COMMISSIONERATE - 2026 (10) TMI 1132 - GSTAT CHENNAI, comprised Hon'ble Praveen Kumar Jain, Member (Judicial), and Hon'ble Shaik Khader Rahman, Member (Technical). The order in Filing No.2626059101000236 followed earlier High Court and Tribunal decisions recognising existing deposits. Its particular importance lies in the fact that the first appellate order upheld one part of the demand while remanding another, which subsequently became the subject of separate proceedings. The Tribunal therefore had to identify both the tax disputed in the present appeal and the deposit available to satisfy its pre-deposit requirement.

The Pre-Deposit Must Be Calculated on the Tax Disputed Before the Tribunal

Order-in-Original No.02/2021-GST-JC dated 29.10.2021 confirmed tax of Rs.3,29,47,353, together with interest and penalty. To pursue its first appeal, LTM deposited Rs.32,94,735 through Form GST DRC-03 dated 28.01.2022. Order-in-Appeal No.16/2023 dated 31.03.2023 subsequently upheld Rs.53,90,420, comprising transitional credit of Rs.17,965 and ITC of Rs.53,72,455. The remaining Rs.2,75,56,933 was remanded. Fresh adjudication of that remanded portion resulted in Order-in-Original No.30/2024-GST(JC) dated 13.08.2024, determining a demand of Rs.17,43,997. That demand was the subject of separate proceedings.

The present Tribunal appeal concerned only Rs.53,90,420, which the first appellate order directly upheld. The remanded branch was outside its scope. By a defect notice dated 06.08.2026, the Registry sought the Electronic Liability Register reflecting adjustment of the pre-deposit against the relevant demand ID. The Department verified the earlier payment of Rs. 32,94,735 in its report dated 07.09.2026 but argued that LTM must separately pay another Rs. 5,39,042. LTM responded that the verified deposit already exceeded the combined requirement for the tax involved in this appeal. The controversy concerned recognising an existing payment, not exempting the mandatory deposit.

A Remanded Demand Is Not the Same as a Finally Deleted Demand

In the earlier reduced-demand cases discussed below, the main comparison was between the original demand and the smaller demand surviving the first appeal. LTM involved an additional complication. The remanded amount had not been finally deleted or decided in the taxpayer's favour. It had entered a separate adjudicatory process, resulting in its own demand and proceedings. Consequently, saying only that the demand was "reduced from Rs.3.29 crore to Rs.53.90 lakh" would give an incomplete picture. The present appeal concerned Rs.53,90,420, while the remanded portion remained separately relevant.

This distinction makes allocation essential. The same money cannot be counted in full towards the pre-deposit in several proceedings. The Tribunal earmarked the amount required for the present appeal and did not count the separate deposits relating to other proceedings. An additional statutory qualification, distinct from the Tribunal's holding, is necessary: Section 107(11) of the CGST Act, 2017 expressly prohibits the First Appellate Authority from referring the case back to the adjudicating authority. The LTM order recorded and proceeded on the existing appellate order; it did not examine the legality of that remand or recognise a general power of remand. The remand is therefore described here as part of the litigation history, not as approval of such a power.

An Earlier Deposit Can Satisfy the Combined Pre-Deposit Requirement

The Department relied on the words "in addition to" in Section 112(8)(b) of the CGST Act, 2017. It argued that the Tribunal-stage 10% had to be paid separately, notwithstanding the earlier excess. The Tribunal instead read those words with the provision's references to the tax arising from the impugned order and the appeal actually filed. On the Rs.53,90,420 disputed in this appeal, it attributed Rs.5,39,042 to the first appellate component under Section 107(6)(b) of the CGST Act, 2017 and Rs.5,39,042 to the Tribunal component under Section 112(8)(b) of the CGST Act, 2017. The combined requirement was Rs.10,78,084, which was covered by the verified deposit of Rs.32,94,735. This calculation did not treat the remanded portion as finally extinguished.

The Tribunal rejected the insistence that the additional component must necessarily be paid through a fresh challan. It found that the requisite amount already stood paid against the relevant demand and could be allocated to both components. This did not waive Section 112(8) of the CGST Act, 2017; it recognised compliance with it. The conclusion remains subject to the applicable statutory framework, including full payment of admitted amounts under Section 112(8)(a) of the CGST Act, 2017, monetary ceilings and any special requirements for other categories of appeals. The cumulative 20% calculation applied here is not a universal formula for every type of Tribunal appeal.

A Reduced Demand Requires Recalculation of the Pre-Deposit

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, the original demand was approximately Rs.2.38 crore. The taxpayer had deposited Rs.23,85,182 for its first appeal. The First Appellate Authority reduced the demand to approximately Rs.40 lakh, making the cumulative requirement discussed before the High Court approximately Rs.8 lakh. The earlier deposit comfortably covered it. The Jharkhand High Court accepted that no further pre-deposit was required for instituting the Tribunal appeal. A payment calculated on a greater original demand did not become irrelevant when the demand was subsequently reduced.

The institutional setting also mattered. GSTAT was not then taking up appeals for disposal, although electronic filing was available. The High Court allowed filing within four weeks, protected the appeal from a limitation objection in those circumstances and permitted physical filing if the electronic system would not accept it. These were case-specific directions, not general extensions available to every appellant. The merits remained open. For present purposes, the decision established that an earlier deposit calculated on a larger demand must be considered against the requirement for the reduced demand. The Jharkhand High Court decision supplied persuasive support outside its territorial jurisdiction and was subsequently followed by the Tribunal decisions discussed here.

Recognition of an Earlier Deposit Does Not Waive Other Filing Requirements

Manoranjan Dash Versus Commissioner, Odisha, Commissionerate Of CT GST & Ors. - 2026 (7) TMI 829 - GSTAT CUTTACK, brought the issue into GSTAT's admission process. The original disputed tax was Rs. 11,34,474, and approximately Rs. 1.13 lakh had been deposited for the first appeal. The appellate order reduced the tax to Rs.1,02,012. The Registry nevertheless identified non-payment of Tribunal pre-deposit as a defect. Following Ashirwad Food Industries, the Cuttack Bench held that no further pre-deposit was necessary because the existing deposit covered the requirement for the reduced demand. Indeed, the earlier deposit exceeded even the entire surviving tax demand.

The order nevertheless preserved the other filing requirements. The taxpayer had paid Rs. 3,000 as filing fee against the Rs. 5,000 required in that case under Rule 110(5) of the CGST Rules, 2017. The remaining Rs.2,000 still had to be paid. The Registry was directed to place the matter before the Bench for orders on admission after proof of fee payment and verification of the earlier deposit. Recognition of an existing pre-deposit did not automatically secure admission or remove the filing-fee defect. The taxpayer still had to meet the other requirements governing the appeal.

The Additional Pre-Deposit May Be Met From an Eligible Existing Deposit

The Revenue subsequently sought reconsideration in Manoranjan Dash Versus Commissionerate Of CT GST, Premananda. Naik-01. - 2026 (9) TMI 1651 - GSTAT CUTTACK. It objected that the earlier pre-deposit ruling had been made without hearing it and sought reconsideration of "in addition to" in Section 112(8)(b) of the CGST Act, 2017. The Cuttack Bench heard the objection but found no ground to interfere. It explained that pre-deposit represents a portion of the disputed tax, not a separate and independent liability requiring fresh payment regardless of the amount already deposited. The statutory requirement had to be tested against the surviving tax and the eligible payment actually available.

The Bench distinguished a substantially reduced demand from one left unchanged in first appeal. With an unchanged demand, the ordinary additional-deposit requirement would apply to any unpaid component. However, where an eligible earlier deposit already covers the aggregate requirement on the reduced tax, another payment is unnecessary. The Bench illustrated the difficulty through a hypothetical appellant who had paid the entire disputed tax under protest; that was an illustration, not an actual finding about the taxpayer's payments. The Revenue relied on Abhijit Nayak Versus The Commissioner of (CT & GST), Odisha and others. - 2025 (12) TMI 84 - ORISSA HIGH COURT, and Commissioner of Income Tax – III Versus M/s. Calcutta Knitwears, Ludhiana - 2014 (4) TMI 33 - Supreme Court, the latter in support of strict interpretation. The Bench distinguished the factual settings and maintained its earlier ruling. It did not make the deposit optional; it found that the deposit already made met the requirement.

Eligible Earlier Payments Must Count Towards the Required Pre-Deposit

M/s. MMTC-PAMP India Private Limited, Represented by its Authorised Signatory, Mr. Omsiva A Versus Deputy Commissioner, Office of the Deputy Commissioner of Central GST and Central Excise, Commissioner (Appeals), Office of the Commissioner of GST and Central Excise (Appeals), Branch Manager, HDFC Bank Limited - 2024 (3) TMI 1274 - MADRAS HIGH COURT, supplied related support in a different setting. It concerned garnishee recovery while the Tribunal was not functional. In one matter, the entire tax liability had already been discharged, leaving interest and penalty. In the other, the Madras High Court recognised prior remittances and directed payment of the identified balance required for pre-deposit. The resulting recovery protection remained conditional on compliance with its directions and Section 112(8) of the CGST Act, 2017.

That decision applied the then-prevailing cumulative 30% framework. The later amendment reduced the Tribunal-stage component, resulting in the ordinary cumulative 20% calculation applied in LTM. The historical percentage must not be carried into the latter case. MMTC-PAMP was not itself an identical excess-deposit case following reduction of the demand. Its relevance was recognition of earlier payments when determining the remaining pre-deposit. LTM relied on it as jurisdictional High Court support alongside the reduced-demand decisions.

Separate Proceedings Require Clear Allocation Without Double Counting

The decisions share a principle but arose in different settings. Ashirwad Food Industries recognised an adequate earlier deposit after a substantial reduction in demand. The July Manoranjan Dash order applied that approach during scrutiny; the September order maintained it after hearing the Revenue's interpretative objection. MMTC-PAMP recognised prior remittances when determining the balance required. LTM applied these principles where the original dispute had divided into a directly confirmed component and a separately remanded component. That divided history required identifying the amount attributable to this appeal and preventing the same deposit from being counted elsewhere.

The Chennai Bench did not treat every payment in the taxpayer's records as a common fund available for all appeals. It recognised an identified deposit associated with the original demand and appropriated Rs.10,78,084 from it for the present appeal. The tax base for this calculation did not include the remanded demand, and it did not count separate deposits. This avoided both ignoring an eligible earlier payment and treating the same money as available in several proceedings. The relevant checks were its connection with the demand, its verified availability and its specific allocation.

An Available Deposit Need Not Be Refunded Merely to Be Paid Again

CBIC Circular No.224/18/2024-GST dated 11.07.2024, particularly paragraphs 7.2 and 8.2, recognises adjustment towards pre-deposit of qualifying payments made through Form GST DRC-03 by using Form GST DRC-03A. The mechanism concerns payments intended for the relevant demand and is subject to its prescribed conditions. It does not make unrelated payments freely transferable between appeals. The Tribunal relied on this guidance and the Department's own verification of LTM's deposit. The circular supported recognition and mapping of an eligible payment; it did not independently waive the statutory deposit.

The Tribunal also rejected a process in which the Revenue would first refund the excess and the taxpayer would then redeposit part of the same money. That cycle would not provide additional revenue security. Its reasoning referred to pre-deposit refund and interest under Section 115 of the CGST Act, 2017, read with Section 56 of the CGST Act, 2017. However, the operative directions did not order immediate refund of the balance above Rs.10,78,084 or award a specified interest amount. The taxpayer's rights concerning the balance were preserved. Recognising a deposit for this appeal and obtaining a refund of any remaining amount are separate questions. In particular, the remanded branch remained relevant to the overall payment history.

Adjustment Requires Verification and Mapping Without Reuse of the Deposit

The portal difficulty was material. Form GST APL-04 had not been generated for the first appellate order, and the relevant demand ID was unavailable. LTM therefore could not complete the expected Form GST DRC-03A adjustment. The Tribunal recognised the verified deposit while directing completion of the missing administrative steps. The jurisdictional proper officer was to map Rs.10,78,084 against the relevant demand when its ID was generated. The First Appellate Authority had to generate Form GST APL-04 within one month from the order dated 06.10.2026, and the Department's authorised representative had to upload it immediately upon generation. LTM was required to file Form GST DRC-03A and upload an undertaking against use of the relevant pre-deposit for another demand.

The Tribunal did not count the separate deposit of Rs.20,40,200 dated 12.06.2026, relating to another appeal against Order-in-Appeal No.332/2025, or Rs.1,74,399, relating to the remanded demand. Under its allocation direction, the Registry appropriated Rs.10,78,084 from the original Rs.32,94,735 for this appeal, and it could not be counted in any other proceeding. The pre-deposit requirement was satisfied and the identified defect was cured, but the Registry was directed to admit the appeal only after compliance with the directions. Verification of payment did not remove the need for proper mapping and the safeguard against reuse.

An Adequate Existing Deposit Should Be Recognised Rather Than Collected Again

The reported sequence involving Ashirwad Food Industries, the two Manoranjan Dash orders and LTM Limited illustrates a recurring pre-deposit dispute as GSTAT proceedings become operational. It does not establish that every Bench has encountered the same facts or adopted an identical approach. These decisions nevertheless provide a practical method: identify the tax actually challenged, calculate the applicable requirement, verify the connected deposit, exclude amounts committed elsewhere and complete the prescribed allocation and mapping. Do not demand a fresh payment solely because the eligible payment was made at an earlier stage.

The limitation is equally important. An earlier deposit does not always eliminate the need for further payment. For illustration, assume an ordinary tax appeal, no applicable cap or special requirement, and Rs.10 lakh of eligible earlier deposit available against the relevant demand. It would cover a cumulative requirement of Rs.8 lakh on a surviving disputed tax of Rs.40 lakh. If the cumulative requirement instead amounted to Rs.16 lakh, a further Rs.6 lakh would remain payable. LTM succeeded because its verified deposit covered the prescribed amount, not because the Tribunal could waive the statute on hardship grounds. The order resolved pre-deposit compliance; it did not allow the disputed ITC or transitional credit on merits. Its principle is recognition of an adequate eligible deposit, with clear allocation and no double counting

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