2026 (3) TMI 581 - HC - GST

Statutory Pre-Deposit cannot be waived in writ jurisdiction; appeals require mandatory deposit absent extraordinary circumstances.

Challenge to an order confirming demand for wrongful availment of input tax credit under Section 74 is not maintainable in writ proceedings where the ... Scope of judicial review in certiorari of administrative orders - wrongful availment of input tax credit - invocation of Section 74 - misstatement and suppression - statutory pre-deposit requirement for filing statutory appeal. Whether the High Court should interfere with the order passed under Section 74 of the CGST Act on the ground of insufficiency of reasons or perversity - HELD THAT:- The Court held that a bare perusal of the impugned order shows that reasons have been given and relevant factors considered; while exercising certiorari jurisdiction the Court is not required to probe the adequacy or sufficiency of reasons unless they are absolutely perverse or tainted by mala fides. No such perversity or mala fide was shown, and therefore interference with the assessment order under Section 74 was not warranted on the present record. The Court thus declined to examine the merits further in the writ petition stage. [Paras 5] The writ petition will not be allowed to quash the order under Section 74 for lack of reasons; no interference was made on the merits at the certiorari stage. Statutory pre-deposit requirement for filing statutory appeal - HELD THAT: - The Court recorded the petitioner's plea for direction to the appellate authority to entertain an appeal without insisting on the statutory pre-deposit or upon a reduced deposit/security. The Court observed that the pre-deposit is a statutory requirement and that no extraordinary circumstance was demonstrated in the instant case to justify waiving the statutory obligation. Accordingly, the Court refused to direct waiver or reduction of the mandatory pre-deposit. [Paras 6, 7] No direction was issued to waive or reduce the statutory pre-deposit; the petitioner's request for such relief was refused. Final Conclusion: The writ petition challenging the order under Section 74 was dismissed; the High Court declined to interfere on certiorari for insufficiency of reasons and refused to direct waiver of the statutory pre-deposit for filing the statutory appeal, while noting that its observations are tentative and will not prejudice adjudication of any appeal on merits. Issues: (i) Whether the order dated 30.09.2025 passed under Section 74 of the CGST Act confirming demand for wrongful availment of input tax credit is amenable to writ jurisdiction; (ii) Whether pre-deposit mandated for preferring the statutory appeal can be waived and the petitioner permitted to file appeal without the mandatory pre-deposit.Issue (i): Whether the impugned demand order under Section 74 (wrongful availment of input tax credit) is liable to be quashed in writ proceedings.Analysis: The impugned order records reasons including findings of misstatement and suppression connected with submission of fake invoices and absence of e-way bills. In exercise of certiorari jurisdiction, adequacy and sufficiency of reasons are not to be re-examined unless reasons are perverse or tainted by mala fides. No such perversity or mala fide is shown on the record.Conclusion: The challenge to the order dated 30.09.2025 under Section 74 is rejected; the writ does not succeed on merits.Issue (ii): Whether the statutory pre-deposit for filing the appeal may be dispensed with and the appeal be entertained without the mandatory pre-deposit.Analysis: The requirement of pre-deposit is statutory. No extraordinary circumstance has been demonstrated that would justify dispensing with the statutory pre-deposit obligation or directing reduced deposit/security. The petitioner's interim offer to furnish security does not suffice to override the statutory requirement in the absence of exceptional justification.Conclusion: Prayer to waive or dispense with the mandatory pre-deposit is refused; the petitioner is not permitted to file the statutory appeal without complying with the pre-deposit requirement.Final Conclusion: The writ petition is dismissed; the impugned tax demand remains subject to the statutory appellate remedy which requires compliance with the pre-deposit condition.Ratio Decidendi: A statutory pre-deposit requirement for preferring an appeal under the CGST framework cannot be waived in writ jurisdiction absent demonstration of extraordinary circumstances, and certiorari will not be granted to reappraise reasoned tax orders unless shown to be perverse or mala fide.