Waiver of pre-deposit denied as allegations of fraudulent ITC and goods-less invoices warranted strict compliance under Section 107(6) of CGST Act

Case: Rohan Aggarwal v. Commissioner of CGST, Delhi North & Ors.

Court: Delhi High Court
Petition No.: W.P.(C) 8045/2025 & CM APPL. 35256/2025
Date of Judgment: 30.05.2025
Category of Dispute: Input Tax Credit – Fraudulent availment and goods-less invoices
Relevant Section: Section 107(6), CGST Act, 2017

Facts (Paras 3–4)

The petitioner, Rohan Aggarwal, filed the writ petition under Article 226 of the Constitution seeking waiver of mandatory pre-deposit under Section 107(6) of the CGST Act for filing appeals against four separate orders-in-original. These orders raised demands aggregating over ₹1.67 crore, with a pre-deposit requirement of ₹16,69,975. The petitioner argued financial hardship and sought exemption from the statutory pre-condition to appeal.

Questions before the Court (Paras 3–5)

The primary issue before the Court was whether the petitioner could be exempted from making the statutory pre-deposit mandated under Section 107(6) of the CGST Act, particularly in cases involving allegations of fraudulent availment of ITC and goods-less invoices.

Observations (Para 5)

The Court observed that Section 107(6) requires a mandatory pre-deposit of 10% of the disputed tax amount as a condition for filing an appeal. It noted that the present case involved serious allegations of fraudulent ITC and invoices without actual supply of goods. In such circumstances, waiver of pre-deposit could not be granted as it would defeat the statutory intent of ensuring bona fides in appeal proceedings.

Judgement (Para 6)

The Court dismissed the writ petition, refusing to waive the statutory pre-deposit. Consequently, the petitioner would have to deposit the mandatory 10% of the disputed tax liability to maintain the appeal. Pending applications were also disposed of.

Table of Cases Referred

No external precedents were cited in this judgment.

Between Fine Lines

For trade and industry, this judgment reaffirms that the statutory requirement of pre-deposit under Section 107(6) is non-negotiable, especially in cases involving allegations of fraudulent ITC or sham transactions. Businesses must factor this into their litigation strategy and financial planning before approaching appellate authorities.

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