Delhi HC Denies Pre-Deposit Waiver u/s.17(6) of GST, Cites Lack of Discretionary Power [Read Order]

The Delhi High Court has dismissed a writ petition filed by M/s Impressive Data Services Pvt. Ltd., which sought exemption from the mandatory pre-deposit requirement under Section 107(6) of the Central Goods and Services Tax Act, 2017 (CGST Act), citing financial hardship and pending government receivables.

The petitioner challenged the pre-deposit condition on the ground that the demand raised for wrongful availment of Input Tax Credit (ITC) during the transition years (2017–2020) was erroneous.

The Petitioner argued that incorrect turnover figures were mentioned due to mistakes by the company’s accountant and that ITC on certain vendors, specifically M/s DST Kumar Traders and M/s Vinay Sales Corporation, which were not availed by the petitioner.

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The petitioner further contended that over Rs. 6.4 crore remained receivable from government departments and approximately Rs. 4 crore worth of securities were also held with the government, seeking leniency in pre-deposit compliance.

On the other hand, the Revenue submitted that the petitioner’s reliance on the decision in Shubh Impex v. Union of India was misplaced as it had been superseded by the binding decision in Anjani Technoplast Ltd. v. CCE, upheld by the Supreme Court.

The Revenue relied on the Delhi High Court’s recent judgment in Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, Dehradun, which held that the statutory pre-deposit under Section 107(6) is mandatory and cannot be waived by the Court.

A bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that Section 107(6) requires a 10% pre-deposit of the disputed tax amount and provides no discretion for the Court to grant a waiver.

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The Court highlighted that prior rulings allowing waivers were per incuriam and contrary to the binding precedent in Anjani Technoplast. The Court clarified that the petitioner may raise the issue of any amount already lying with the Department or other government entities as partial fulfillment of the pre-deposit before the appellate authority.

The court noted that Rs. 20 lakhs already lay with the Department out of the Rs. 64 lakhs total demanded. The writ petition was accordingly disposed of, with liberty to approach the appellate authority for any appropriate relief.

To Read the full text of the Order CLICK HERE

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