Facts of the Case:

In this case, the petitioner filed the present writ petition challenging Order-in-Appeal dated 01.11.2024, whereby the appeal preferred under Section 107 of the CGST/OGST Act, 2017 was rejected on the ground of non-compliance with the mandatory pre-deposit requirement under Section 107(6). The petitioner had earlier assailed the Order-in-Original, by filing an appeal manually since the original order itself had been issued manually. The appeal was duly registered and allotted a number, and even a notice of personal hearing was issued by the Appellate Authority.

The petitioner contended that the rejection of the appeal was unjustified since the requisite pre-deposit of ₹1,58,179 (10% of the disputed tax) had already been made on 04.09.2025, fulfilling the statutory requirement under Section 107(6). It was argued that once the appeal was admitted, numbered, and hearing notice issued, the Appellate Authority could not later dismiss it on a technical ground.

The Department, however, maintained that non-compliance with Section 107(6) at the time of filing rendered the appeal not maintainable, and the Appellate Authority rightly refused to hear it on merits.

Issue:

Whether an appeal under Section 107 of the CGST/OGST Act can be rejected for non-compliance of pre-deposit when the appeal was already registered and listed for hearing, and the appellant subsequently complied with the pre-deposit requirement.

Held that:

The High Court held that although Section 107(6) mandates pre-deposit of a prescribed percentage of the disputed tax before an appeal is entertained, the conduct of the Appellate Authority in registering the appeal, assigning an appeal number, and issuing a notice of hearing amounted to a waiver or omission to enforce the pre-deposit condition at the threshold. 

Since the petitioner had subsequently deposited the requisite pre-deposit amount on 04.09.2025, the Court found it appropriate, in the interest of justice, to set aside the rejection order and restore the appeal to the file for adjudication on merits.

The petitioner was directed to appear before the Appellate Authority on or before 28.11.2025, failing which the earlier appellate order would automatically revive. The Court clarified that it had expressed no opinion on the merits of the appeal and directed the authority to dispose of the matter expeditiously.

The judgment reinforces that where an appellate authority admits and registers an appeal and proceeds with hearing formalities, it cannot later reject the appeal solely on the ground of non-compliance with pre-deposit, particularly when the taxpayer subsequently complies. The High Court recognized that procedural lapses should not override substantive justice once statutory compliance is achieved before adjudication.

Case Name: M/s GAEA ENGINEERS AND CONTRACTORS PRIVATE LIMITED v. CHIEF COMMISSIONER OF CGST & CENTRAL EXCISE, ODISHA & ORS. dated 06.11.2025

To read the complete judgement 2025 Taxo.online 2874