Pre-deposit for penalty disputes under GST was not required beyond tax-linked deposit, with seized goods released on security.

Where the statutory appellate tribunal had not yet been constituted and the dispute concerned penalty alone, no further pre-deposit was required under Section 112 because the provision was treated as directed to the tax amount in dispute, not penalty. Interim protection was also granted against enforcement of the penalty order, and release of the seized goods was permitted subject to compliance with Rule 140 of the CGST Rules, with the amount already deposited at the first appellate stage to be adjusted while fixing the security to be furnished.

---

---

Issues: (i) Whether any further pre-deposit was required for an appeal under Section 112 of the Uttar Pradesh Goods and Services Tax Act, 2017 where only penalty was in dispute and no appellate tribunal had yet been constituted. (ii) Whether the penalty order and seizure consequences warranted interim protection and release of the goods subject to compliance with Rule 140 of the Central Goods and Services Tax Rules, 2017.

Issue (i): Whether any further pre-deposit was required for an appeal under Section 112 of the Uttar Pradesh Goods and Services Tax Act, 2017 where only penalty was in dispute and no appellate tribunal had yet been constituted.

Analysis: The appellate remedy was stated to lie before the tribunal, but the tribunal had not been constituted. The order noted that Section 112 contemplates pre-deposit only in relation to the tax amount in dispute, whereas the present matter concerned penalty alone. On that basis, no further deposit was treated as necessary.

Conclusion: No further pre-deposit was required in the facts of the case.

Issue (ii): Whether the penalty order and seizure consequences warranted interim protection and release of the goods subject to compliance with Rule 140 of the Central Goods and Services Tax Rules, 2017.

Analysis: In view of the non-constitution of the tribunal and the limited nature of the dispute, interim protection was granted against the impugned penalty order. The seized goods were directed to be released subject to compliance with the prescribed security requirements, and the amount already deposited at the stage of the first appeal was directed to be adjusted while determining the security to be furnished.

Conclusion: The penalty order was stayed and release of the goods was permitted subject to compliance with Rule 140.

Final Conclusion: The petitioner obtained interim protection against enforcement of the penalty order, along with release of the seized goods on furnishing the requisite security, and the modification application succeeded.

Ratio Decidendi: Where the statutory appellate tribunal has not been constituted and the dispute concerns penalty alone, no further pre-deposit can be insisted upon beyond what is legally attributable to the tax amount in dispute, and interim protection may be granted subject to security under the prescribed rules.

---