2025-VIL-1125-CAL
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SGST High Court Cases

GST – Appeal against demand of penalty and interest absence any tax liability, Dismissal of appeal on the ground of delay and non-compliance with the condition of statutory pre-deposit, Insertion of proviso in Section 107(6) of CGST Act, 2017 - Whether the requirement of pre-deposit under Section 107(6) of the CGST Act, 2017 was applicable where the order impugned only involved demand of penalty and interest and there was no tax liability - HELD - The requirement of pre-deposit under Section 107(6) is not applicable in cases where the appeal was carried against an order pertaining only to penalty and there being no amount of tax in dispute - It is well settled that right to prefer appeal is a substantive right. It is equally settled that when a statute provides for a right to prefer appeal, it can also limit or restrict such right by imposing appropriate conditions. Requirement of pre-deposit for filing appeal under Section 107(6) of the CGST Act is one such condition. The non-existent conditions affecting substantive rights of appeal cannot be imported into the statute - When there was no provision for making any pre-deposit in respect of an appeal against an order demanding penalty or interest the petitioner could not have been asked to make pre-deposit where the order impugned only involved demand of penalty and interest – The Section 107(6) was subsequently amended by the Finance Act, 2025 thereby inserting the following proviso mandating pre-deposit even in cases where penalty has been imposed. The above proviso has taken effect only from October 01, 2025 and would not apply to the facts of the present case inasmuch as the same was not there in the statute book at the time when the appeal was preferred – The matter is remanded back to Appellate Authority with direction to consider the application for condonation of delay and if satisfied with the causes shown, to proceed to hear the appeal on merits without insisting on pre-deposit - The writ petition is disposed of
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