Existing Pre-Deposits Exceeding the Required Percentage of Scaled-Down Demands Preclude the Need for Additional Payments

Issue

Whether an assessee is required to make a fresh pre-deposit for filing an appeal before the Appellate Tribunal when the amount already deposited at the first appellate stage exceeds the statutory percentage required for the reduced demand.

Facts

Initial Demand: The Order-in-Original raised a demand of approximately ₹2.38 crores.
First Appeal Deposit: To file the first appeal under Section 107, the assessee made a pre-deposit of ₹23.85 lakhs (roughly 10% of the initial demand).
First Appellate Outcome: The first appellate authority “scaled down” the demand significantly, reducing it to approximately ₹40 lakhs.
The Dispute: The Revenue insisted on a fresh pre-deposit for the second appeal to the Tribunal. The assessee argued that since ₹23.85 lakhs was already with the department (which is far more than the 20% required for a ₹40 lakh demand), no further payment should be necessary.

Decision

Sufficiency of Funds: The Court observed that the purpose of a pre-deposit is to secure a percentage of the disputed tax. Since the amount already deposited (₹23.85 lakhs) was substantially higher than the 20% required for the revised demand of ₹40 lakhs, the statutory requirement was already more than satisfied.
No Double Jeopardy: The Tribunal cannot insist on a “fresh” or “additional” deposit if the existing deposit covers the liability mandated by law for the next stage of appeal.
Mandate to Tribunal: The Court directed the Tribunal to accept the appeal without insisting on any further pre-deposit.
Outcome: Ruled in favor of the assessee.

Key Takeaways

Credit for Prior Deposits: Pre-deposits made at the first appellate stage (10%) are adjusted and considered when calculating the requirement for the Tribunal stage (total 20%).
Scaled-Down Demands: If the demand is reduced during the first appeal, the “disputed amount” for the second appeal is the lower figure. If the initial 10% deposit already covers 20% of that lower figure, the assessee owes nothing more.
Mathematical Practicality: The law intended to secure a portion of the tax, not to create a repetitive procedural hurdle that ignores payments already held by the Government.

HIGH COURT OF JHARKHAND

Ashirwad Food Industries

Union of India^*

Rajesh Shankar, J.

W.P.(T) No. 469 of 2026

FEBRUARY 9, 2026

Ms. Amrita Sinha, Mrs. Shweta Suman and Ms. Pragunee Kashyap, Advs. for the Petitioner. P.A.S. Pati, Sr. SC, CGST for the Respondent.

ORDER

1. Heard learned counsel for the parties.

2. With the consent of and at the request of the learned counsel for the parties, we dispose of this petition finally.

3. The petitioner challenges Order-in-Appeal No. 227-232/CGST/RAN/2025 dated 30.06.2025 to the extent the Commissioner, Central Goods and Services Tax (CGST) has confirmed the demand raised in the Order-in-Original No. 138/GST/ADC/RAN/2024-25 dated 04.02.2025 along with the interest and penalty.

4. As against the above order, the petitioner has the remedy of an appeal before the G.S.T Appellate Tribunal (GSTAT). However, this Appellate Tribunal, does not appear to be fully functional. Therefore, the petitioner has invoked the extraordinary jurisdiction of this Court to challenge the impugned order.

5. Mr. P.A.S. Pati, learned counsel for the respondents, submits that though the Appellate Tribunal is presently not taking up appeals for adjudication, still, some of the members have already been appointed and e-filing of appeals is permitted. He refers to a provisional acknowledgment for submission of a departmental appeal dated 28.01.2026 on record in support of his submission. Further, Mr. Pati states that if a pre-deposit of 20% is made, then, the department does not initiate any coercive measures to enforce the demand.

6. Ms. Amrita Sinha, learned counsel for the petitioner, submits that at the first appellate stage, the petitioner had made a pre-deposit of Rs.23,85,182/- because the demand in the order in original was approximately Rs.2.38 crores. She submits that the first appellate authority has considerably scaled down the demand which is now approximately Rs.40,00,000/-. Accordingly, she submits that the pre-deposit of 20% would come to around Rs.8,00,000/-. She further points out that since the petitioner has already made a predeposit of approximately Rs.23.85 lakhs, the Tribunal should not now insist upon any further pre-deposit.

7. We have perused the documents on record and based upon the same, we find substance in the contention advanced by Ms. Amrita Sinha. Considering the deposit of Rs.23.85 lakhs already made at the first appellate stage, we agree that there would be no question of making any further pre-deposit for instituting an appeal against the impugned order dated 30.06.2025.

8. Ms. Sinha states that the petitioner will appeal the impugned order dated 30.06.2025 within a maximum of four weeks from today. If such appeal is indeed filed within four weeks from today, then, the Tribunal should decide the appeal on its own merits and in accordance with law without adverting to the issue of limitation. This is because the petitioner was bonafide pursuing the matter before this Court and even two dates, the Tribunal is not taking up the appeals for disposal. The petitioner’s impression about inability to file the appeal on this ground cannot be said to be unreasonable or lacking in bonafide.

9. In case there are any issues about the system not accepting the petitioner’s appeal within four weeks from today, then, the petitioner, is allowed to file the appeal in the physical format. The same should be accepted by the Tribunal without insisting upon any fresh pre-deposit.

10. All contentions of all parties on merits are, however, left open for the Tribunal to decide. This Court has not adverted to the rival contentions on merits of the matter.

11. This writ petition is disposed of in the above terms without any costs order.

12. All concerned to act on an authenticated copy of this order.