Non-Consideration of ₹2.01 Cr Earlier Deposit: Delhi HC Allows Appeal Before GSTAT Without Further Pre-Deposit by Dec 25th [Read Order]

The Delhi High Court permitted petitioners to approach the GST Appellate Tribunal (GSTAT) without making any additional pre-deposit, after finding that the authorities failed to consider the taxpayer’s earlier deposit of ₹2,01,20,299 made during prior GST ( Goods and Services Tax ) cancellation proceedings.

A & T Security Services Pvt. Ltd., engaged in supplying security services, had faced an earlier GST registration cancellation process due to non-filing of returns. Though the Department issued a Show Cause Notice (SCN) in September 2019, the company filed its pending GSTR-1 and GSTR-3B returns and subsequently deposited ₹2.01 crore.

Consequently, the registration was restored by the Commissioner (Appeals) on 27 August 2021, conditional after the company cleared all tax liabilities. The company maintained that the ₹2.01 crore deposit was part of this compliance.

Later, a fresh SCN dated 31 July 2024 was issued alleging fraudulent ITC availment. The company replied on 2 September 2024, and personal hearings ensued, leading to an Order-in-Original dated 31 January 2025, imposing penalties under Section 122 of the CGST/SGST Acts.

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The Commissioner (Appeals), in an order dated 16 May 2025, confirmed penalties not only on the company but also individually on its directors, Tejvir Malik, Rajesh Kumar Sharma, and Vivek Kumar. The table on page 5 of the judgment clearly lists penalties of ₹1,77,332 + ₹2,01,20,299 on the company, and ₹2,01,20,299 + ₹25,000 on each director.

Before the High Court, counsel for the petitioner argued that the ₹2.01 crore deposit, made during earlier proceedings long before the new SCN, was never considered by either the adjudicating authority or the appellate authority.

However, the Department’s counsel conceded that this payment "does not appear to have been considered"in the impugned order.

The Court reviewed documents related to the 2019- 2021 cancellation proceedings and confirmed that the payments had indeed been made.

Justices Prathiba M. Singh and Shail Jain observed that both the adjudicating authority and the appellate authority ought to have taken into account the earlier deposit of ₹2.01 crore, especially since these payments were made much before the issuance of the 2024 SCN.

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The bench noted that now that the GST Appellate Tribunal is fully functional and the proper remedy for the petitioner is to pursue an appeal before GSTAT, where the matter can be reconsidered holistically.

The court noted that “However, in the facts of the present case, considering the substantial amount of money which has already been paid by the Petitioner, the Court is of the opinion that the Petitioner ought to be permitted to avail of the appellate remedy before the GST Appellate Tribunal without any further payment of any amount as pre-deposit.”

The Court therefore directed that the appeals be filed before GSTAT by 25 December 2025, and once filed, the Tribunal must entertain them on merits without rejecting them on the ground of delay. Additionally, GSTAT has been instructed to examine all documents evidencing the earlier deposit.

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