Impressive Data Services Private Limited Vs Commissioner (Appeals-I)
Date: April 14, 2025
Subject Matter
GST law does not permit waiver of the pre-deposit u/s 107(6)
Summary
The case concerns a petition filed by M/s Impressive Data Services Private Limited seeking exemption from the mandatory pre-deposit as required by Section 107(6) of the Central Goods and Services Tax Act, 2017. The petitioner was issued a Show Cause Notice regarding the wrongful availment of Input Tax Credit (ITC) over the fiscal years 2017-18, 2018-19, and 2019-20. The petitioner contended that there were errors in the returns filed during the transition to the GST regime which led to incorrect turnover being reported, though they had not actually availed ITC for certain entities. The petitioner highlighted financial difficulties, stating they were owed substantial amounts by government departments and sought waiver of the pre-deposit requirement. The Respondent argued against the petitioner's position by citing precedent cases, stating that the law does not permit waiver of the pre-deposit in this context. The Court found that according to Section 107(6), the law is clear that an appeal can only be filed if the pre-deposit is made. Consequently, the prayer for waiver of the pre-deposit was denied, but the petitioner was encouraged to bring any relevant amounts tied to their claim before the Appellate Authority. The Court disposed of the petition without considering the merits of the case.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner– M/s Impressive Data Services Private Limited seeking exemption from the pre-deposit requirements mandated in terms of Section 107(6) of the Central Goods and Services Tax Act, 2017 (hereinafter, the Act).
3. The case of the Petitioner is that a Show Cause Notice No. 11/2022-23 vide No. GEXCOM/AE/VRFN/OTH/157-AE/O/o/Commr-GST- Delhi(E)/1593 dated 14th June, 2022, was issued by the Respondent- Department– Commissioner (Appeals-1) Central Tax GST in respect of wrongful availment of Input Tax Credit (hereinafter, ITC) by the Petitioner during the period 2017-18, 2018-19 and 2019-20.
4. The submission of the Petitioner is that there were some mistakes in the Returns filed, at the time when the transition took place into the GST regime and due to such mistakes on part of the accountant of the Petitioner, wrong turnover was mentioned, though, ITC was never availed on the said Secondly, it is submitted that in respect of two of the entities being M/s DST Kumar Traders and M/s Vinay Sales Corporation, the Petitioner had never availed the ITC during the relevant period. Thus, both the amounts which are being raised are incorrectly being raised by the Respondent-Department, hence the prayer for pre- deposit waiver.
5. The submission on behalf of the Petitioner by ld. Counsel is that the Petitioner is a supplier to various Government entities and the Petitioner has to recover more than Rs. 6.4 crores from Government Departments. In addition, the bank statement of the Petitioner is relied upon to argue that some securities to the tune of Rs.4 crores are also lying with Government Departments. Hence, the Petitioner may be granted a waiver of pre-deposit.
6. Ld. Counsel for the Respondent submits that the Petitioner relies upon the decision in Shubh Impex v. Union of India, (2018) 361 ELT 199 (Del) in support of its petition. However, the said decision in Shubh Impex (Supra) is no longer being followed by the Coordinate Bench of this Court which has followed the earlier judgment of Anjani Technoplast Ltd. v. CCE, (2017) 348 ELT A132 (SC) which has also been upheld by the Supreme Court. Thus, it is the contention of the Respondent 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.
7. The Court has considered the The question raised herein is whether the requirements mandated in terms of Section 107(6) of the Act for pre-deposit can be waived or not. Section 107(6) of the Act reads as under:
“(6) 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 of the remaining amount of tax in dispute arising from the said order, [subject to a maximum of twenty-five crore rupees,] in relation to which the appeal has been filed.
[Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five per cent of the penalty has been paid by the appellant]”
In terms of the above provision, insofar as the admitted tax, interest or penalty is concerned, the entire amount would have to be deposited. In so far as the disputed amount is concerned, 10% of the tax would have to be deposited as a pre-deposit along with the appeal. The said provision does not, in the opinion of this Court, give discretion for waiver of the pre-deposit. In any event in Diamond Entertainment (supra) in the context of the Excise Act, the Court has clearly observed as under:
“12. In Pioneer Corporation v. Union of India, (2016) 340 ELT 63, Shubh Impex v. Union of India, (2018) 361 ELT 199 (Del) and Manoj Kumar Jha v. DRI, (2019) 365 ELT 166 (Del), this Court, even while dealing with cases in which the appealhad been filed before the CESTAT after 6th August, 2014, nevertheless, allowed the appeal to be prosecuted on payment of partial pre-deposit, given the financial stringency in which the respective appellants, before it, were placed; a reading of these decisions would reveal, that the attention of this Court had not been invited to its earlier judgment in AnjaniTechnoplast (supra) which set out, in clear and unambiguous terms, that every appeal, before the CESTAT, filed after the amendment of Section 35F/129E would be maintainable only if mandatory pre- deposit were made.
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15. In view of the aforesaid merger, of the judgment of the Division Bench of this Court in Anjani Technoplast (supra) with the order passed by the Supreme Court in appeal there against, we are bound, by Article 141 of the Constitution of India, to follow the law laid down in Anjani Technoplast (supra), in preference to that laid down in Pioneer Corporation (supra), Manoj Kumar Jha (supra) and Shubh Impex (supra).
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21. Inasmuch as the judgment in Pioneer Corporation (supra), Shubh Impex (supra) and ManojKumar Jha (supra) are contrary to the law laid downin Anjani Technoplast (supra) as well as to the law laid down in Vice-Chancellor, University of Allahabad v. Dr. Anand Prakash Mishra (supra), A.B. Bhaskar a Rao v. C.B.I. (supra), ManishGoel v. Rohini Goel (supra) and State of Bihar v. Arvind Kumar (supra), none of which have been noticed in the said decisions, it is not possible for us to follow the decisions in Pioneer Corporation (supra), Shubh Impex (supra) and Manoj Kumar Jha (supra), on which learned counsel places reliance.”
8. In view of the settled legal position, the prayer for waiver of pre-deposit cannot be entertained. However, if there is any amount lying with the Government entities which the Petitioner wishes to rely upon as being part of the pre-deposit, the Petitioner is free to make such a prayer before the concerned Appellate Authority. It is also submitted on behalf of the Petitioner that Rs. 20 lakhs is also lying with the Department out of a total of Rs. 64 lakhs which is to be deposited by the Petitioner. This submission may also be made before the concerned Appellate Authority.
9. The Petitioner is accordingly relegated to the Appellate authority under Section107 of the All contentions are left open. The petition is disposed of in these terms. All pending applications, if any, are also disposed of.
10. Needless to add, this Court has not considered the merits of the matter.