I-Karb E-Sol Private Limited & anr. Vs Joint Commissioner of State Tax Behala Charge & ors. (Calcutta High Court)
Mandatory pre-deposit is must for filing appeal in spite of financial catastrophe and huge financial crunch and liabilities: Calcutta High Court
The Calcutta High Court, in the case of I-Karb E-Sol (P.) Ltd. v. Joint Commissioner of State Tax, Behala Charge, has affirmed that the mandatory pre-deposit stipulated under Section 107(6) of the Central Goods and Services Tax (CGST) Act is a prerequisite for filing an appeal. The court dismissed a writ petition filed by M/s I-Karb E-Sol Private Limited, a registered taxpayer, which challenged the appellate authority’s rejection of their appeal due to non-payment of this pre-deposit. The Petitioner had appealed an adjudication order related to a tax period from April 2018 to March 2019 and cited significant financial hardship, requesting the waiver of the statutory pre-deposit. However, the appellate authority refused to entertain the appeal due to this non-compliance, leading the Petitioner to seek recourse from the High Court.
The High Court observed that Section 107(6) of the CGST Act clearly mandates that an appeal cannot be filed unless the appellant pays the admitted amount of tax, interest, fine, and penalty in full, along with 10% of the remaining disputed tax, up to a specified ceiling. The court emphasized that the statute grants no discretion to the appellate authority to waive or reduce this mandatory pre-deposit requirement, even when faced with pleas of financial difficulty. Consequently, since the appeal was deemed not maintainable due to the absence of the pre-deposit, the requirement for the appellate authority to issue a reasoned order under Section 107(12) did not arise. The High Court concluded that the Petitioner failed to demonstrate any exceptional circumstances that would warrant the invocation of its writ jurisdiction, thereby dismissing the petition. This judgment reinforces the strict adherence to the pre-deposit condition for maintaining an appeal under GST law.
