Assessees must file statutory appeals against final GST assessment orders subject to 5 percent pre-deposit.

Assessees must file statutory appeals against final GST assessment orders subject to 5 percent pre-deposit.

Assessees must file statutory appeals against final GST assessment orders subject to 5 percent pre-deposit.

Issue

Whether assessees challenging final GST assessment orders can be granted a complete waiver of the statutory pre-deposit of 5 percent and allowed to bypass the appellate remedy under Section 107 of the CGST Act.

Facts

• For the tax periods 2018-19 to 2023-24 (up to December 2023), State tax officers conducted a search and seized 14 files from the assessee’s premises.

• Show cause notices were issued alleging fraudulent transactions and the use of bogus invoices.

• The assessee asserted that the seized files contained essential invoices required to respond to the notices, but copies were not provided.

• Final assessment orders were passed for all relevant tax periods. For 2018-19, the High Court had already relegated the matter to an alternative statutory remedy.

• The Department contended that the seized files were not relied upon for framing the assessments.

• The Supreme Court previously directed the assessee to pursue statutory appeals against the final orders, subject to a pre-deposit of 5 percent of the principal tax.

• The assessee filed instant applications seeking modification of the Supreme Court’s order to allow filing the statutory appeals without making the 5 percent pre-deposit.

Decision

• The Supreme Court rejected the prayer for a waiver of the statutory pre-deposit of 5 percent.

• The Court clarified that statutory appeals may be preferred within the prescribed time period under Section 107 of the CGST Act.

• The Court held that since final assessment orders exist, the assessee must pursue the statutory appellate remedy, leaving it open to the assessee to avail any other remedies available in law.

Key Takeaways

• No Blanket Waiver of Pre-deposit: Courts will not grant an absolute exemption or waiver from statutory pre-deposit requirements for filing appeals under Section 107 of the CGST Act.

• Mandatory Statutory Route Post-Final Order: Once final assessment orders are passed, assessees are required to exhaust statutory remedies before the Appellate Authority rather than seeking relief through extraordinary writ jurisdiction or modifications.

• Non-Reliance on Seized Documents: Contentions regarding non-supply or non-reliance on seized files can be evaluated on merits by the Appellate Authority, uninfluenced by preliminary judicial observations.