Mandatory pre-deposit in GST appeals: challenge to a section 74 demand must proceed through the statutory appellate remedy on merits.

The Delhi HC noted that a challenge to a GST demand under section 74 was better pursued through the statutory appeal under section 107, where a mandatory pre-deposit applies. As the petitioner had already deposited a substantial amount, the Court directed filing of the appeal within 30 days on payment of the balance pre-deposit. The appellate authority was also asked to consider the interim reply dated 15 April 2024 and any other material filed by the petitioner, and then decide the matter on merits. The appeal, if filed within the directed time, was not to be rejected on limitation.

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Issues: Whether the petitioner should be relegated to the appellate remedy under the Central Goods and Services Tax Act, 2017 with permission to file the appeal on payment of the remaining pre-deposit amount and with consideration of the reply already filed.

Analysis: The petition challenged a demand raised under section 74 of the Central Goods and Services Tax Act, 2017. The Court noted that the petitioner had already deposited a substantial amount and that the statutory appeal under section 107 required a mandatory pre-deposit. In these circumstances, the Court directed the petitioner to approach the appellate authority within 30 days with the balance pre-deposit. The appellate authority was also directed to consider the interim reply dated 15 April 2024 and any other material filed by the petitioner, and then decide the appeal on merits. The appeal, if filed within time as directed, was not to be rejected on limitation.

Conclusion: The petitioner was relegated to the statutory appellate remedy with a direction to complete the balance pre-deposit and the appeal was to be heard on merits, with protection against dismissal on limitation.

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