‘GSTAT Now Functional’: Telangana HC Directs to File Appeal Before Tribunal, Denies Adjustment of Tax Paid as Pre-Deposit [Read Order]

The Telangana High Court disposed of a writ petition directing to approach the newly functional Goods and Services Tax Appellate Tribunal ( GSTAT ) for relief instead of invoking writ jurisdiction and also denied the adjustment of tax paid as pre-deposit.

Chief Justice Aparesh Kumar Singh and Justice G.M. Mohiuddin held that since the GSTAT has started functioning and the prescribed appellate window for filing cases has been notified, the petitioner should file an appeal before the Tribunal within the stipulated timeframe.

The petitioner, S. Ashok Kumar, Managing Director of M/s Annai Infra Developers Ltd., Tamil Nadu had challenged the order-in-appeal dated 30 September 2025, passed by the Commissioner (Appeals), which confirmed the penalty imposed under the Central Goods and Services Tax Act, 2017.

During the hearing, the Court was informed that the GSTAT has become operational and that the Appellate Tribunal, through its order dated 24 September 2025 under Rule 123 of the GST Appellate Tribunal (Procedure) Rules, 2025, has classified the categories of cases and corresponding time periods within which appeals can be filed under Section 112 of the CGST Act.

For orders passed between specific dates, the appeal window opens on 1 February 2026 and remains available until 30 June 2026.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The Court also noted that the Finance Act, 2025 (notified on 29 March 2025) had amended Section 112(8) of the CGST Act by inserting a proviso requiring appellants to pre-deposit 10% of the penalty amount in addition to any amount payable under Section 107(6) before filing an appeal, where the dispute pertains solely to penalty without any tax demand.

In the present case, since only a penalty was imposed and no tax demand was involved, the petitioner requested permission to adjust amounts already paid under Form GST DRC-03 during the investigation toward the 10% pre-deposit requirement.

However, the Revenue opposed the request, arguing that payments made in Form DRC-03 were towards tax liability, whereas the order under challenge concerned only penalty, and therefore, the two could not be offset.

Accepting the Revenue’s contention, the High Court held that payments made toward tax liability during investigation cannot be adjusted against the pre-deposit of penalty required for filing an appeal.

The Bench granted the petitioner eight weeks to make the mandatory 10% pre-deposit and directed that no coercive action be taken against him during this period or until the GSTAT decides his appeal, provided the pre-deposit is made within the specified time.

Accordingly, the writ petition was disposed of.

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