2021 (9) TMI 269 - HC - GST

Pre-deposit before filing af appeal - It is contended that, the entire tax liability has been deducted from the cash ledger, thereby the requirement of 10% of prerequisite deposit is already stands satisfied. - Section 107 (6)(b) of the Central Goods and Services Tax Act, 2017 - HELD THAT - The appeal having been filed and the application for condonation of delay was pending, if the amount of entire liability which was imposed by order dated 12/09/2019, and tax part having been deducted then it would amount to satisfaction of deposit of tax of 10% to the account of the respondent - the dismissal of the appeal only on the ground that 10% amount has not been deposited cannot be too technically viewed and always the petitioner can go for adjudication on merits. The entire tax part having been deducted, it is directed that the respondent shall hear the application for condonation of delay and if the application for condonation of delay is allowed, then the respondent may hear the appeal on merits - Petition disposed off.

Summary

Issues:
1. Failure to deposit 10% of tax liability as required under Section 107 (6)(b) of the Central Goods and Services Tax Act, 2017.
2. Delay in filing the appeal and non-payment of the 10% amount leading to dismissal of the appeal.
3. Applicability of Section 107 (4) of the Central Goods and Services Tax Act, 2017 in cases of delayed filing and pre-deposit.

Analysis:
1. The petitioner's grievance was based on the contention that despite the entire tax liability being deducted from the cash ledger, the appeal was dismissed for not depositing the 10% amount required under Section 107 (6)(b) of the Central Goods and Services Tax Act, 2017. The petitioner argued that the deposit was already satisfied by the deduction of the tax liability. The court noted that the appeal was filed with a delay and the 10% amount was not paid, leading to a show cause notice. The respondent claimed that the tax liability was deducted on a specific date, indicating compliance.

2. The documents revealed that the appeal was filed after the deadline, and a show cause notice was issued due to the delay and non-payment of the 10% amount. Despite the tax liability being deducted later, the appeal was dismissed solely for non-deposit of the 10% amount. The court emphasized that if the tax liability was deducted before the appeal was dismissed, the deposit requirement should be considered satisfied. The court highlighted the possibility of adjudicating the delay and extending the filing period under Section 107 (4) of the Act.

3. The court concluded that if the tax liability was deducted before the dismissal of the appeal, the deposit requirement should be deemed fulfilled. The court directed the respondent to consider the application for condonation of delay and proceed with hearing the appeal on its merits. The order dismissing the appeal solely for non-deposit of the 10% amount was set aside, emphasizing that the petitioner should have the opportunity for adjudication on the merits. The judgment disposed of the petition with these observations.