Desk of CA. Praveen Sharma – 1061 Series (CAPS) 

Delhi High Court in the case of Gaurav Jain & Another v. Joint Commissioner (Appeals-II), CGST Delhi Zone & Another

The Delhi High Court has held that the amended requirement of a 10% pre-deposit on disputed penalty under Section 107(6) of the CGST Act is prospective in nature and cannot be applied to proceedings that commenced before 1 October 2025.

The Court observed that the right to appeal is a vested statutory right, and the legal dispute begins with the issuance of the Show Cause Notice (SCN). Since the SCN in this case was issued before the amendment came into force, the petitioners could not be compelled to comply with the new pre-deposit requirement.

Accordingly, the Court directed the Appellate Authority to entertain the appeals without insisting on the 10% penalty pre-deposit, while ensuring compliance with the other applicable statutory requirements. The judgment provides significant relief to taxpayers in pending penalty-only appeals initiated before the amendment.

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CAPS