TaxTMI 
TaxTMI 
2026 (9) TMI 1419
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.... without receipt of goods and issued invoices without actual supply. Consequently, a show-cause notice was issued, making the following demands: a. IGST of Rs.5,77,45,147/- for the alleged wrong availment - under Section 74(1) of the Act, along with interest under Section 50 of the Act; b. CGST of Rs.4,66,73,124/- for the alleged wrong availment - under Section 74(1) of the Act, along with interest under Section 50 of the Act; c. SGST of Rs.4,66,73,124/- for the alleged wrong availment - under Section 74(1) of the TSGST Act, along with interest under Section 50 of the TSGST Act; d. Penalty equivalent to the tax specified in (a), (b) & (c) of the respective Acts, were proposed to be imposed under Sections 122(1)(vii) read with Section 74(1) of the respective Acts. e. Penalty of Rs.15,10,91,395/- (IGST - 5,77,45,147/-, CGST - Rs.4,66,73,124/- & TSGST - Rs.4,66,73,124/-) equivalent to the ITC alleged to have been wrongly availed based on invoices without supply of goods/services - under Section 122(2)(b) of the respective Acts. f. Penalty of Rs.15,23,78,323/- (IGST - Rs.32,09,897/-, CGST - Rs.7,45,84,213/- & TSGST - Rs.7,45,84,213/....
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....rima facie case exists on the merits and contend that the Directorate General of GST Intelligence (DGGI) lacked authority to issue any notice seeking imposition of penalty under Section 122 of the Act. It is averred that powers to the DGGI in this regard were first conferred only by Circular No. 254/11/2025-GST dated 27 October 2025, operative from that date; accordingly, any action purportedly taken by the DGGI prior thereto is without jurisdiction and cannot give rise to an obligation to furnish the statutory pre-deposit. 6. Heard the Learned Counsel appearing for the appellants and also the Learned Department Representative and also the grounds filed in connection with the defect raised by the Registry. 7. The appellants submit that the proviso to Section 112(8) of the Act - which mandates a pre-deposit equal to 10% of the penalty in appeals - was introduced with effect from 1 October 2025 and therefore applies only to proceedings instituted on or after that date. In the present case the adjudicating order was passed prior to the said date and, consequently, the proviso cannot be held to govern these proceedings. 7.1 The appellants further contend that the proviso canno....
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....f filing of the instant appeal, which is the relevant date to be reckoned, is reproduced below for ease of reference: (8) No appeal shall be filed under sub-section (1), unless the appellant has paid- (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and (b) a sum equal to [ten per cent.] of the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of section 107, arising from the said order, [subject to a maximum of [twenty crore rupees]], in relation to which the appeal has been filed. [Provided that in case of any order demanding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to ten per cent. of the said penalty, in addition to the amount payable under the proviso to sub-section (6) of section 107 has been paid by the appellant.] The proviso, as above, was very much in force on the date of passing of the impugned order viz., 31.10.2025 and therefore, it is just and proper that the instant appeal ought to be in compliance with the said proviso. 12. We observe tha....
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....ing right of appeal is not a mere alteration in procedure. Such a vested right cannot be taken away except by express enactment or necessary intendment. An intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication." 15. The decision of the Hon'ble High Court of Delhi in Gaurav Jain v. Joint Commissioner (Appeals)-II, CGST Delhi Zone & Anr., (2026-TIOL-914-HC-DEL-GST) is directly on point. In Gaurav Jain the Court examined the amendment to Section 107(6) of the CGST Act, which took effect from 01.10.2025. The show-cause notice in that case was issued on or before 25.06.2025, so the lis was instituted before the amendment came into force. The High Court held that where proceedings are instituted prior to the effective date of an amendment, the rights and obligations arising from those proceedings are governed by the law as it stood at their inception. Consequently, appeals arising out of such pre-amendment proceedings, even if filed after 01.10.2025, are not subject to the pre-deposit requirement introduced by the amended Section 107(6). 15.1 The Court applied ....