Case Title: M/s Sri Nandi Studio and Colour Lab v. Assistant Commissioner of Central Tax & Anr.
Court: High Court of Karnataka, Bengaluru
Petition No.: Writ Petition No. 25272 of 2024 (T-RES)
Date of Judgment: 19 February 2025
Category: Appeal under GST – Requirement of Statutory Pre-Deposit
Relevant Sections: Sections 74, 107(1), 107(4), and 107(6)(b) of the CGST Act, 2017
Facts (Para 1–4)
The petitioner, M/s Sri Nandi Studio and Colour Lab, a registered GST taxpayer engaged in trading photographic film, challenged the order of the Commissioner (Appeals), Mysuru, which had dismissed its appeal on the ground that the mandatory pre-deposit of 10% of disputed tax was not paid “along with” the appeal.
The original adjudication order under Section 74 was passed on 20.10.2021. The petitioner filed its appeal before the Appellate Authority on 02.12.2021, within the three-month period under Section 107(1), and deposited the 10% pre-deposit on 07.12.2021, i.e., five days later but still within limitation.
Questions Before the Court
Whether an appeal under Section 107(1) of the CGST Act can be rejected merely because the statutory pre-deposit was made a few days after filing the appeal but within the prescribed limitation period.
Observations (Para 5–8)
The Court observed that Section 107 of the CGST Act grants three months to file an appeal with a possible one-month condonation under sub-section (4). Sub-section (6)(b) requires a 10% pre-deposit but does not rigidly mandate simultaneous payment at the time of filing.
Justice Pandit held that a liberal interpretation must be applied — as long as the pre-deposit is made within the limitation period, the appeal should be treated as compliant. The Appellate Authority erred in rejecting the appeal solely for not depositing the amount on the exact date of filing.
Judgment (Para 9)
The Court allowed the writ petition, quashed the impugned order dated 29.12.2022, and directed the Commissioner (Appeals) to consider the appeal on merits. The Court clarified that the statutory deposit made within limitation satisfies Section 107(6)(b).
Summary of Cases Referred
| Case | Citation / Court | Key Principle / Verdict |
|---|---|---|
| M/s Sri Nandi Studio and Colour Lab v. ACCT | Karnataka HC (2025) | Appeal cannot be rejected if 10% pre-deposit is made within limitation; Section 107(6)(b) to be interpreted liberally. |
Between Fine Lines
For trade and tax professionals, this ruling reinforces that procedural timing of the 10% pre-deposit under Section 107 is not fatal if the payment is made within the statutory period for filing the appeal. Authorities must adopt a substantive justice approach rather than rejecting appeals on rigid procedural grounds.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
