Delhi HC ruled that pre-1 October 2025 GST appeals follow old law; 10% pre-deposit of disputed penalty cannot be mandated.
Pre-2025 GST Appeals: No 10% Penalty Pre-Deposit Required
The Delhi High Court held that appeals arising from show-cause notices (SCNs) issued before 1 October 2025 are governed by the pre-amendment provisions of Section 107(6) of the CGST Act. Consequently, the requirement to pre-deposit 10% of the disputed penalty amount does not apply.
The Court explained that the amended provisions introducing the 10% pre-deposit condition for both tax and penalty were effective only from 1 October 2025. The provision is procedural but benefits the taxpayer in pending cases and must be applied retrospectively in appeals pending as of that date.
The amendment operates retrospectively only in favour of the assessee, and the department cannot insist on pre-deposit conditions that were not in force at the time of issuance of the SCN.
This decision provides relief to taxpayers against escalated financial burdens. Practitioners should verify the date of SCN issuance and challenge any insistence on penalty pre-deposits in legacy cases.
