2025 (4) TMI 234 - HC - GST

No Pre-Deposit Required Under Section 107(6)(b) of CGST Act When Tax Already Paid; Amnesty Scheme Rights Preserved

The HC found the petitioner was not required to make a 10% pre-deposit under Section 107(6)(b) of CGST Act since the entire tax amount had already been ... Maintainability of appeal - requirement to make a pre-deposit of 10% of the disputed tax amount under Section 107(6)(b) of the CGST Act, 2017 - HELD THAT:- Petitioner’s appeal stands dismissed for non payment of mandatory predeposit, though the petitioner has paid the entire tax due as per the order of determination. Further, if the petitioner has paid the entire tax imposed in the order of determination, they are at liberty to apply for the benefit under Section 128A CGST Act. If any difficulty is encountered in filing Form SPL-02; petitioner can approach the 4th respondent, who shall immediately take appropriate measures to rectify any technical glitches to enable the petitioner to claim the benefit under Section 128A of the CGST Act, if otherwise eligible. Petition disposed off. ISSUES PRESENTED and CONSIDEREDThe primary legal issues considered in this judgment are:Whether the petitioner is required to make a pre-deposit of 10% of the disputed tax amount under Section 107(6)(b) of the CGST Act, 2017, when the entire tax amount has already been paid.Whether the petitioner is eligible to avail the benefits under Section 128A of the CGST Act, despite the appeal being dismissed for non-payment of the mandatory pre-deposit.Whether the technical glitch in the GST portal affects the petitioner's right to apply for the Amnesty Scheme under Section 128A of the CGST Act.ISSUE-WISE DETAILED ANALYSIS1. Requirement of Pre-deposit under Section 107(6)(b) of the CGST Act, 2017Relevant legal framework and precedents: Section 107(6)(b) of the CGST Act mandates a pre-deposit of 10% of the disputed tax amount for an appeal to be entertained.Court's interpretation and reasoning: The Court noted that the petitioner had already paid the entire tax amount as determined by the order dated 08.12.2023. Therefore, the requirement of a further pre-deposit was not applicable.Key evidence and findings: The petitioner provided evidence of payment of the entire tax amount on 07.03.2024, as seen in Ext.P5. Additionally, the GST portal reflected the pre-deposit requirement as 'NIL'.Application of law to facts: Since the petitioner had fulfilled the tax payment as per the original determination, the Court found that the pre-deposit requirement was effectively satisfied.Treatment of competing arguments: The respondents did not contest the payment of the full tax amount; thus, the Court focused on the procedural aspect of the pre-deposit requirement.Conclusions: The Court concluded that the petitioner was not required to make an additional pre-deposit and could proceed with the appeal.2. Eligibility for Benefits under Section 128A of the CGST ActRelevant legal framework and precedents: Section 128A of the CGST Act pertains to the Amnesty Scheme, which allows for the waiver of interest and penalties under certain conditions.Court's interpretation and reasoning: The Court interpreted that the appeal proceedings and the Amnesty Scheme are independent. The dismissal of the appeal for non-payment of the pre-deposit does not preclude the petitioner from applying for the benefits under Section 128A.Key evidence and findings: The respondents clarified that only cases under Section 74, involving fraud or willful misrepresentation, are excluded from the Amnesty Scheme. The petitioner's case did not fall under this exclusion.Application of law to facts: The petitioner is eligible to apply for the Amnesty Scheme, provided they submit the necessary application in Form SPL-02 as per Rule 164 of the CGST Rules.Treatment of competing arguments: The respondents confirmed that the appeal dismissal does not impact the petitioner's eligibility for the Amnesty Scheme.Conclusions: The Court held that the petitioner could apply for the benefits under Section 128A, independent of the appeal's status.3. Impact of Technical Glitch on GST PortalRelevant legal framework and precedents: The technical functioning of the GST portal does not directly affect the legal rights under the CGST Act.Court's interpretation and reasoning: The Court acknowledged the petitioner's concerns about the GST portal but emphasized that technical issues should not impede legal rights.Key evidence and findings: The portal showed the requirement of the 10% deposit as 'NIL', yet the appeal was still active, indicating a possible glitch.Application of law to facts: The Court directed that any technical issues encountered by the petitioner in filing Form SPL-02 should be addressed by the 4th respondent.Treatment of competing arguments: The respondents assured that technical glitches would not affect the petitioner's right to apply for the Amnesty Scheme.Conclusions: The Court instructed the petitioner to seek assistance from the 4th respondent to resolve any technical issues promptly.SIGNIFICANT HOLDINGSPreserve verbatim quotes of crucial legal reasoning: The Court emphasized, 'The appeal proceedings and the Scheme of Amnesty (waiver of interest and penalty) are two independent matters and mutually exclusive too and the rejection of the appeal will not hamper their right to apply for the Amnesty Scheme in any way.'Core principles established: The judgment clarified that the payment of the full tax amount satisfies the pre-deposit requirement and that technical glitches should not impede the exercise of legal rights under the CGST Act.Final determinations on each issue: The Court concluded that the petitioner was not required to make an additional pre-deposit, could apply for the benefits under Section 128A, and should resolve any technical issues with the assistance of the 4th respondent.