2026-VIL-1223-BOM
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SGST High Court Cases

GST - Pre-deposit for appeal against disputed interest alone - Sections 107(6) and 112(8) of the CGST Act, 2017 - SCN for interest under Section 50 on the delayed payment - Respondent contended that interest is compensatory, that it arises automatically on admitted self-assessed tax paid late - Whether the percentage-based pre-deposit under Section 112(8)(b) is required where only interest is in dispute and the entire tax has been paid - HELD - Section 107(6) and Section 112(8) require deposit in full of the admitted amount of tax, interest, fine, fee and penalty and a sum equal to ten per cent. of the remaining amount of tax in dispute. The provisions make no mention of any deposit towards interest where interest alone is under challenge. There is therefore no requirement of pre-deposit of interest when the entire amount of tax has been paid - The FAA did not insist on any pre-deposit of interest, and the Tribunal accepted the appeal and issued an acknowledgment without such pre-deposit, given the undisputed fact that the entire tax had been deposited. The merits of the interest demands, including the tax base, payment dates and computation, remain for decision in the pending appeals, and the contentions on payment under protest and on refund are kept open - The percentage-based pre-deposit under Section 112(8)(b) does not extend to disputed interest alone where the entire tax has been paid - The writ petitions are allowed - Recovery of disputed interest during pendency of appeal before the Tribunal - Sections 79(1)(c), 107(7) and 112(9) of the CGST Act, 2017 - Petitioner contended that upon compliance with Section 112(8), recovery of the balance amount is deemed stayed under Section 112(9) until disposal of the appeal, and that the recovery and the restrictions on its bank accounts hampered its business - Respondent supported the recovery on the ground that the interest arose on admitted self-assessed tax paid late and was recoverable under Section 75(12) read with Section 79 - Whether recovery of the disputed interest by bank notices is permissible while the appeal is pending before the Tribunal - HELD - Once the appellant has made the statutorily required pre-deposit, recovery proceedings for the balance amount are deemed to be stayed under Section 107(7) at the first appeal stage and under Section 112(9) until disposal of the appeal before the Tribunal. Since no pre-deposit of interest is required where the entire tax is paid and only interest is in dispute, the Petitioner is entitled to the protection of Section 112(9) - The recovery initiated is in the teeth of Section 112(9), the recovery communications and the bank notices are quashed insofar as they seek recovery of the interest covered by the pending appeals - The Respondent is directed to withdraw the bank notices, communicate the withdrawal to the banks and lift the debit restrictions imposed solely pursuant to them.
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