Court says challenge to 300-page order-in-original must be pursued under Section 107 of CGST Act; rules amended pre-deposit clause cannot be applied retrospectively to a show cause notice issued before 1 October 2025.
The Delhi High Court has refused to entertain a writ petition challenging a GST order-in-original, holding that the petitioner had an effective alternative remedy by way of appeal under Section 107 of the Central Goods and Services Tax Act, 2017.
A Division Bench comprising Justice Anil Kshetarpal and Justice Bharat Parashar was hearing the petition filed by Krishan Pal Singh, who sought quashing of an order-in-original dated 31 January 2025 as well as the show cause notice issued on 26 July 2024. The petitioner also challenged the applicability of the amended pre-deposit provisions introduced through Notification No. 16/2025-Central Tax, effective from 1 October 2025.
According to the petitioner, the impugned order was non-speaking, violated principles of natural justice, and suffered from jurisdictional defects. He argued that the amended provisions requiring a higher pre-deposit could not be applied to proceedings that commenced before 1 October 2025.
The Court, however, noted that the order-in-original ran into more than 300 pages and contained findings on the petitioner’s alleged role in the wrongful availment and passing on of input tax credit through 13 firms. The Bench observed that whether the findings adequately dealt with the petitioner’s contentions would require an examination of facts and merits, which the Court was not inclined to undertake in writ jurisdiction when a statutory appeal was available.
At the same time, the Court accepted the petitioner’s submission on the pre-deposit issue, relying on its earlier ruling in Gaurav Jain v. Joint Commissioner (Appeals-II), CGST Delhi Zone. The Court held that since the show cause notice had been issued on 26 July 2024, the appellate remedy would be governed by Section 107(6) as it stood on the date of issuance of the notice. The substituted proviso introduced with effect from 1 October 2025, requiring deposit of 10% of the disputed penalty, would not apply retrospectively.
Importantly, the Court also noted that the impugned order, insofar as the petitioner was concerned, imposed only penalty and did not raise any tax demand. Therefore, if the petitioner files an appeal within two weeks, the Appellate Authority must consider it in accordance with law without insisting on deposit of 10% of the disputed penalty under the amended proviso.
With these observations, the High Court disposed of the writ petition and the pending applications.
Bottom Line :
GST - Writ petition against Order-in-Original not entertained when statutory appeal under Section 107 of CGST Act is available - Amended pre-deposit provision under substituted proviso to Section 107(6) cannot be applied to proceedings arising from show cause notice issued prior to 01.10.2025 - Where only penalty is imposed, appeal to be considered without insisting on 10% deposit of disputed penalty under substituted provision.
Statutory provision(s): Section 107, Section 107(6) of the Central Goods and Services Tax Act, 2017
