No Exceptions: You Must Pay 10% Deposit for GST Appeals, Delhi High Court Rules

The Hon'ble High Court of Delhi in M/s Impressive Data Services Private Limited v. Commissioner (Appeals-I), Central Tax GST, Delhi, W.P.(C) 4662/2025 dated April 15, 2025 held that the mandatory pre-deposit requirement under Section 107(6) of the Central Goods and Services Tax Act, 2017 cannot be waived by the High Court in a writ petition, as the provision does not provide any discretion for such waiver.

Facts of the Case

The Petitioner, M/s Impressive Data Services Private Limited, received a Show Cause Notice No. 11/2022-23 dated June 14, 2022, from the Respondent-Department – Commissioner (Appeals-1) Central Tax GST Delhi regarding alleged wrongful availment of Input Tax Credit (ITC) during the period 2017-18, 2018-19, and 2019-20.

The Petitioner claimed that mistakes were made in the filing of Returns during the transition to the GST regime due to errors by their accountant, resulting in incorrect turnover being mentioned, although they maintained that ITC was never availed on the said amount.

Further, the Petitioner contended that in respect of two entities – M/s DST Kumar Traders and M/s Vinay Sales Corporation – they had never availed the ITC during the relevant period. The Petitioner argued that the amounts being raised by the Respondent-Department were incorrect.

The Petitioner sought exemption from the pre-deposit requirements mandated under Section 107(6) of the CGST Act, 2017, which requires the appellant to deposit 10% of the disputed tax amount along with the appeal. The Petitioner's counsel argued that the company was a supplier to various Government entities and had over Rs. 6.4 crores to recover from Government Departments. Additionally, securities amounting to approximately Rs. 4 crores were also lying with Government Departments. Based on these financial considerations, the Petitioner sought a waiver of the pre-deposit.

The Petitioner relied on the decision in Shubh Impex v. Union of India, (2018) 361 ELT 199 (Del) to support their petition for waiver.

The Respondent countered that the Shubh Impex decision was no longer being followed by the Coordinate Bench of the Delhi High Court, which had instead followed the earlier judgment in Anjani Technoplast Ltd. v. CCE, (2017) 348 ELT A132 (SC), which had been upheld by the Supreme Court. The Respondent argued that the decision in W.P.(C) 10091/2019 titled Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, Dehradun & Anr. would therefore be applicable.

Issue

Whether the High Court can waive the mandatory pre-deposit requirement under Section 107(6) of the Central Goods and Services Tax Act, 2017 for filing an appeal against a GST demand?

Held by the Court

The Hon'ble High Court of Delhi in W.P.(C) 4662/2025 held that:

The Court analyzed Section 107(6) of the CGST Act, which mandates that no appeal shall be filed unless the appellant has paid the admitted tax, interest, fine, fee, and penalty in full, along with 10% of the remaining disputed tax amount.

The Court determined that this provision does not provide any discretion for waiver of the pre-deposit requirement. The Court referenced the decision in Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, which had clarified that while previous Delhi High Court decisions like Pioneer Corporation v. Union of India, Shubh Impex v. Union of India, and Manoj Kumar Jha v. DRI had allowed appeals to proceed with partial pre-deposits due to financial stringency of appellants, those decisions had not considered the earlier judgment in Anjani Technoplast Ltd. v. CCE.

The Court noted that the Anjani Technoplast judgment, which had been upheld by the Supreme Court, had clearly established that every appeal filed after the amendment of the relevant sections would be maintainable only if the mandatory pre-deposit was made. The Court was bound by Article 141 of the Constitution of India to follow this precedent.

Consequently, the Court held that the prayer for waiver of pre-deposit could not be entertained. However, the Court permitted the Petitioner to approach the Appellate Authority with certain submissions: (1) If there were any amounts lying with Government entities that the Petitioner wished to rely upon as being part of the pre-deposit, and (2) The Petitioner's claim that Rs. 20 lakhs was already lying with the Department out of the total Rs. 64 lakhs to be deposited.

The petition was disposed of, relegating the Petitioner to the Appellate Authority under Section 107 of the Act, with all contentions left open. The Court clarified that it had not considered the merits of the matter.

Relevant Sections

"Section 107(6) of the Central Goods and Services Tax Act, 2017"

Cases Referred

1. Anjani Technoplast Ltd. v. CCE, (2017) 348 ELT A132 (SC)

2. Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, Dehradun & Anr. (W.P.(C) 10091/2019)

3. Shubh Impex v. Union of India, (2018) 361 ELT 199 (Del)

4. Pioneer Corporation v. Union of India, (2016) 340 ELT 63

5. Manoj Kumar Jha v. DRI, (2019) 365 ELT 166 (Del)

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