Recovery Beyond 10% of Disputed GST Demand Satisfies S.107(6) Pre‑Deposit: Calcutta HC Remands Appeal [Read Order]
The Court clarified that no order of refund would be passed at this stage since the petitioner had approached the Court much later after recovery of the disputed tax
The Calcutta High Court, in a recent case, has set aside the appellate authority’s dismissal of the taxpayer’s appeal for non‑deposit and directed that the matter be heard on merits, holding that recovery of disputed tax beyond 10% satisfies the mandatory pre‑deposit requirement under Section 107(6) of the Central Goods and Services Tax Act 2017 ( WBGST/CGST)
The petitioner, Arup Kumar Chatterjee, had challenged the order of the appellate authority dated May 11, 2023, passed by the appellate authority under Section 107 of the WBGST Act, 2017/CGST Act, 2017which dismissed his appeal against a demand order passed under Section 74 of the Act on the ground of non‑compliance with the mandatory pre‑deposit requirement.
The petitioner had sought a waiver of the pre‑deposit, contending that the demand itself was illegal. However, the appellate authority rejected the appeal without hearing the waiver application. Following this, the GST authorities proceeded to recover the entire disputed tax, leaving the petitioner in financial distress.
Before the High Court, counsel for the petitioner argued that since the entire disputed tax had already been recovered, the statutory condition of depositing 10% of the disputed tax stood fulfilled.
It was further submitted that the petitioner had delayed approaching the Court due to penury and the expectation that the GST Appellate Tribunal under Section 112 would soon become functional. A supplementary affidavit was filed explaining the reasons for delay.
The Court observed that the appellate authority has no power to waive the statutory pre‑deposit requirement.
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However, in view of the fact that the Tribunal is not yet functional and that recovery of more than 10% of the disputed tax had already been effected, the Court, presided over by Justice Om Narayan Rai, held that once more than 10% of the disputed tax has already been recovered by the authorities, the condition of pre‑deposit under Section 107(6) of the WBGST/CGST Act, 2017, stands satisfied, and no further deposit can be insisted upon.
Accordingly, the order of dismissal was set aside, and the matter remanded to the appellate authority for fresh consideration.
Importantly, the Court clarified that no order of refund would be passed at this stage since the petitioner had approached the Court much later after recovery of the disputed tax. The writ petition was disposed of with these observations, ensuring that the appeal will now be heard on the merits without requiring any further pre‑deposit.
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