Lava International Limited Vs Union of India (Allahabad High Court)
The Allahabad High Court disposed of a writ petition challenging procedural irregularities arising from an adjudication order dated 15.12.2025 under the Central Goods and Services Tax Act, 2017. The petitioner intended to file a statutory appeal under Section 107, which requires deposit of 10% of the disputed tax demand, without any obligation to deposit penalty at the stage of appeal.
However, the adjudicating authority issued two separate demand notices (DRC-07) on 16.12.2025—one covering tax and equal penalty, and another covering additional penalty. This bifurcation compelled the petitioner to file two separate appeals against a single adjudication order, thereby requiring an additional deposit of 10% on the penalty demand in the second appeal. The Court found this action prima facie inexplicable, as the statute contemplates a single appeal against a combined demand of tax and penalty with pre-deposit limited to tax.
The revenue proposed withdrawal of both notices and issuance of a fresh composite DRC. The Court accepted this proposal and directed that a fresh DRC-07 be issued within one week, with limitation for appeal running from the date of its service.
The Court further permitted the petitioner to file a single statutory appeal upon deposit of 10% of the disputed tax demand. It also directed that no coercive recovery be made during the pendency of the appeal. The petition was disposed of accordingly, without further observations.
