Quantification of Pre-Deposit for Filing an Appeal before the GST Appellate Tribunal: The Emerging Principle after Manoranjan Dash
Summary: Article discusses the statutory pre-deposit requirements for appeals before the GST Appellate Tribunal under Sections 107 and 112 of the CGST Act, 2017, with emphasis on the GST Appellate Tribunal’s decision in Manoranjan Dash. It explains that pre-deposit is a statutory condition for entertaining an appeal and distinguishes it from payment of the disputed tax. The article outlines the provisions governing pre-deposit in first appeals and Tribunal appeals, discusses situations where the disputed tax demand is reduced by the First Appellate Authority, and examines the Tribunal’s decision that an earlier pre-deposit may satisfy the Tribunal-stage requirement where it already exceeds the cumulative amount calculated on the reduced tax demand. The article notes that the Tribunal relied on the Jharkhand High Court’s decision in M/s Ashirwad Food Industries vs Union of India, reproduces relevant observations from both decisions, provides illustrative numerical examples, mentions the possible contrary argument based on the phrase “in addition to” in Section 112(8), and concludes with the author’s observations regarding adjustment of pre-deposit and procedural considerations.
Statutory appeal mechanism under the CGST Act
1. The Central Goods and Services Tax Act, 2017 provides a structured hierarchy for challenging adjudication orders. Under Section 107, a person aggrieved by an order passed by an adjudicating authority may file a first appeal before the prescribed Appellate Authority. An order passed by the Appellate Authority or Revisional Authority may thereafter be challenged before the Goods and Services Tax Appellate Tribunal under Section 112.
2. The right of appeal is a statutory right. Consequently, the legislature may prescribe conditions for exercising that right, including limitation, prescribed forms, payment of admitted liability and mandatory pre-deposit. The Supreme Court has repeatedly recognized that a statutory appeal may validly be made conditional upon pre-deposit of a specified portion of the disputed demand.
Concept and object of pre-deposit.
3. Under scheme of GST Act payment of amount of prescribed pre-deposit is condition precedent for entertaining of appeal. Pre-deposit is not payment of the disputed tax demand on merits. It is a statutory deposit required for entertaining an appeal. Its object is to balance two competing considerations, protecting government revenue during prolonged litigation and preserving the taxpayer’s right to obtain appellate scrutiny without paying the entire disputed demand.
4. The amount deposited also operates as a substitute for coercive recovery. Sections 107(7) and 112(9) provide that, upon payment of the prescribed amount, recovery proceedings for the balance amount are deemed to be stayed during the pendency of the appeal.
5. Thus, pre-deposit is protective rather than punitive. It should be calculated strictly according to the statutory language and only on the component expressly identified by the legislature.
Pre-deposit in first appeal.
6. Statutory provision-Section 107(6)- No appeal shall be filed under sub-section (1), unless the appellant has paid- (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty crore rupees, in relation to which the appeal has been filed.
7. Provided that in case of any order demanding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to ten per cent. of the said penalty has been paid by the appellant.
8. Section 107(6) provides that no first appeal shall be filed unless the appellant has paid in full the potion of admitted tax, interest, fine , fee and penalty and paid ten per cent of the remaining amount of tax in dispute arising from the order appealed against, subject to the prescribed monetary ceiling.
9. The material expression is “tax in dispute.” Therefore, in an ordinary demand involving tax, interest and penalty, the ten per cent pre-deposit is calculated only on the disputed tax component and not on disputed interest or penalty. However, the entire admitted portion of tax, interest, fine, fee and penalty must first be discharged.
10. For example, where the order confirms tax of ₹60 lakh, interest of ₹12 lakh and penalty of ₹ 6lakh, and the entire demand is disputed, the normal pre-deposit under Section 107(6) would be ₹6 lakh—ten per cent of the disputed tax of ₹60 lakh.
Pre-deposit before Appellate Tribunal u/s 112(8) of the Act.
11. Relevant legal provision Section 112.(8) -No appeal shall be filed under sub-section (1), unless the appellant has paid- (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and (b) a sum equal to section ten per cent of the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of section 107, arising from the said order subject to a maximum of twenty crore rupees, in relation to which the appeal has been filed.
[Provided that in case of any order demanding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to ten per cent. of the said penalty, in addition to the amount payable under the proviso to sub-section (6) of section 107 has been paid by the appellant.
9) Where the appellant has paid the amount as per sub-section (8), the recovery proceedings for the balance amount shall be deemed to be stayed till the disposal of the appeal.
12. Section 112(8) provides for quantification of the amount of pre-deposit. After its amendment, Section 112(8)(b) requires payment of ten per cent of the remaining amount of tax in dispute, in addition to the amount paid under Section 107(6), subject to a maximum of ₹20 crore under the CGST Act. The present provision therefore contemplates an additional deposit at the Tribunal stage, ordinarily resulting in a cumulative deposit equivalent to twenty per cent of the disputed tax.
13. The expression “arising from the said order” is significant. The order appealed against before GSTAT is the order of the First Appellate Authority—not the original adjudication order in its unmodified form. Consequently, the disputed tax for the Tribunal appeal must ordinarily be identified with reference to the demand surviving under the appellate order.
Amount of pre-deposit where the disputed tax is reduced in first appeal.
14. Where there is no reduction in tax in the first appeal, the appellant requires to pay amount of ten percent of disputed tax as per order in original as pre-deposit. A difficulty arises where the original tax demand is substantially reduced by the First Appellate Authority. The taxpayer may already have deposited ten per cent of the larger original demand. Should he nevertheless make a fresh deposit of ten per cent of the reduced demand?
15. A mechanical reading of the words “in addition to” may suggest that a separate payment is necessary at every appellate stage. However, a purposive and demand-oriented interpretation supports adjustment of the deposit already made against the cumulative requirement calculated on the tax demand surviving after the first appeal.
16. Once the original order is modified, the enforceable demand is the demand sustained by the appellate order. The pre-deposit cannot logically continue to be calculated on a demand that has ceased to exist.
GST Appellate Tribunal -Manoranjan Dash
17. In the case of Manoranjan Dash v. Commissioner, Odisha Commissionerate of CT & GST, decided by GST Appellate Tribunal on Dated 8.7.2026, the adjudicating authority had confirmed tax of ₹11,34,474, apart from interest and penalty. While filing the first appeal, the appellant deposited pre-deposit ₹1,13,447, representing ten per cent of the original disputed tax.
18. The First Appellate Authority substantially reduced the liability and confirmed only ₹1,02,012 as tax, ₹98,680 as interest and ₹10,202 as penalty. When the appeal was filed before GSTAT, the Registry raised a defect regarding non-payment of the Tribunal-stage pre-deposit.
19. The appellant contended that ten per cent of the tax surviving under the appellate order came to approximately ₹10,201. Since ₹1,13,447 had already been deposited at the first appellate stage, the earlier deposit was more than sufficient to satisfy even the cumulative requirement calculated with reference to the reduced tax demand.
20. The GSTAT accepted the contention. It held that the First Appellate Authority had modified the original tax demand and that the deposit already made sufficiently covered the pre-deposit required for the Tribunal appeal. Relying upon the Jharkhand High Court’s decision in Ashirwad Food Industries, the Tribunal concluded that no further pre-deposit under Section 112 was required.
The GST Appellate Tribunal has observed that
21. “Para 12. The Section 112 of the Act envisages payment of full amount of admitted tax, interest, fine, fee and penalty and ten per cent of the remaining amount of tax in dispute as pre-deposit while preferring appeal before the Tribunal. This amount is in addition to the pre-deposit already made under the Section 107 of the Act while preferring appeal before the First Appellate Authority. The fact before us is that the learned First Appellate Authority has reduced the original demand of tax to 1,02,012/-. In essence, the original demand of tax stands modified to the extent ordered by the learned First Appellate Authority. It is the submission of the learned Counsel that they have already made a pre-deposit of ten per cent of the original disputed tax amounting to Rs. 1,13,447/- during first appeal while preferring appeal before the First Appellate Authority, which covers the pre-deposit of Rs.10,201/- required for filing the present appeal before the Appellate Tribunal. We find that the issue of pre-deposit decided by the Hon’ble High Court in the case of M/s Ashirwad Food Industries (supra) squarely applies to the present case of pre-deposit contested by the Appellant. We are inclined to hold that no further pre-deposit is required to be made under the Section 112 of the Act.”
22. The order is important because it treats pre-deposit as relatable to the subsisting disputed tax and not as an inflexible, stage-wise levy divorced from the relief already granted in appeal.
23. It also underline the principle that appeal cannot be rejected without giving an opportunity to make payment of short pre-deposit.
24. M/s Ashirwad Food Industries vs Union of India
25. In the similar situation the Hon’ble High Court of Jharkhand in the case of M/s Ashirwad Food Industries vs Union of India [W.P.(T) No. 469 of 2026], wherein the Hon’ble Court has held that,
” Para 6.- Ms. Amrita Sinha, learned counsel for the petitioner, submits that at the first appellate stage, the petitioner had made a pre-deposit of Rs.23,85,182/- because the demand in the order in original was approximately Rs.2.38 crores. She submits that the first appellate authority has considerably scaled down the demand which is now approximately Rs.40,00,000/-. Accordingly, she submits that the pre-deposit of 20% Page 9 of 78 would come to around Rs.8,00,000/-. She further points out that since the petitioner has already made a pre-deposit of approximately Rs.23.85 lakhs, the Tribunal should not now insist upon any further pre-deposit.
Para 7.- We have perused the documents on record and based upon the same, we find substance in the contention advanced by Ms. Amrita Sinha. Considering the deposit of Rs.23.85 lakhs already made at the first appellate stage, we agree that there would be no question of making any further pre-deposit for instituting an appeal against the impugned order dated 30.06.2025.”
Application of aforesaid case Law.
26. Let us take one example for determination of pre-deposit in view of the ratio of aforesaid case Law. In the case where, adjudicating authority confirms disputed tax of ₹1 crore. The taxpayer pre-deposits ₹10 lakh under Section 107(6). The First Appellate Authority has reduced the tax demand to ₹30 lakh.
27. On the reduced demand, the cumulative pre-deposit at the Tribunal stage would be Rs 3 lakh (ten percent of Rs 30 lakh ) under section 107(6) and further Rs 3 Lakh ( ten percent of 30 Lakh ) under section 112(8)
28. The total requirement would therefore be ₹6 lakh. Since the taxpayer has already deposited ₹10 lakh, no further deposit should be required. The excess deposit of ₹4 lakh would continue to remain subject to adjustment or refund in accordance with the final outcome and the statutory refund provisions.
29. Conversely, if the First Appellate Authority reduces the tax demand to ₹70 lakh, the cumulative requirement would be ₹14 lakh. Since ₹10 lakh was already deposited, an additional ₹4 lakh would be payable before GSTAT.
Adverse view and caution.
30. The possible adverse argument arises from the literal wording of Section 112(8), particularly the phrase “in addition to the amount paid under Section 107(6).” The Revenue may contend that Section 112 creates an independent obligation to make a fresh ten per cent deposit, irrespective of the amount deposited earlier.
31. However, the earlier deposit is being adjusted against and not waived from the cumulative statutory requirement calculated on the surviving disputed tax.
Conclusion
32. The decisions in Manoranjan Dash and Ashirwad Food Industries advance a sound principle that pre-deposit must be quantified with reference to the tax demand actually surviving under the order appealed against before GSTAT. Where the amount already deposited at the first appellate stage equals or exceeds the cumulative requirement on the reduced demand, insisting upon a further deposit would result in excessive blockage of working capital without advancing the object of the statute.
33. The principle does not grant a waiver of statutory pre-deposit. It merely recognizes adjustment of an amount already deposited against the correctly quantified obligation. Until the issue is authoritatively settled by a larger Bench or the Supreme Court, appellants should place complete calculations, electronic liability register entries, challans and the appellate order before the Registry and expressly rely upon Manoranjan Dash and Ashirwad Food Industries.
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Author: Motiram Kanadje | Retired Joint Commissioner of State Tax | Author can be reached via email E-mail momakanadje@gmail.com
Disclaimer: Nothing contained in this document is to be construed as legal opinion or view of author whatsoever and the content is to be used strictly for informational and educational purposes. While due care has been taken in preparing this article, certain mistakes and omissions may creep in. The author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this article nor for any action taken in reliance thereon
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