No 10% pre-deposit required on any Penalty-only order from SCN issued prior to October 01, 2025

Last updated: 04 August 2026

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The Delhi High Court ruled that the requirement to pay 10% of a penalty as pre-deposit for an appeal, introduced from October 1, 2025, does not apply to cases where the Show Cause Notice (SCN) was issued before this date. The court affirmed that the right to appeal and its conditions are determined by the law in place when the dispute (lis) begins, which is typically the date of the SCN. Therefore, appeals arising from SCNs issued prior to October 1, 2025, are not subject to this new pre-deposit rule.

Court :
Delhi High Court

Brief :
The Hon’ble Delhi High Court in Gaurav Jain & Anr. v. Joint Commissioner (Appeals-II), CGST Delhi Zone & Anr. [W.P.(C) No. 8414 of 2026 dated July 31, 2026] held that the proviso to Section 107(6) of the Central Goods and Services Tax Act, 2017 ( “the CGST Act” ), as substituted with effect from October 01, 2025, mandating pre-deposit of ten (10%) per cent of the penalty for filing an appeal against an order demanding penalty without involving any demand of tax, does not govern an appeal arising out of adjudicatory proceedings initiated by a Show Cause Notice issued prior to October 01, 2025, and held that the right of appeal, together with the conditions governing its exercise, vests on the date of commencement of the lis , i.e., the date of issuance of the Show Cause Notice, and not on the date of the Order-in-Original or the date of filing of the appeal.

Citation :
W.P.(C) No. 8414 of 2026 dated July 31, 2026

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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