Facts of the Case:

In this case, the petitioner approached the Gujarat High Court seeking relief from the statutory requirement of making a pre-deposit under Section 107(6) of the Central Goods and Services Tax Act, 2017 for filing an appeal against an adverse GST order. The petitioner submitted that he was facing severe financial hardship and was unable to arrange the mandatory pre-deposit of ₹19 lakh, which effectively prevented him from pursuing the statutory appellate remedy. It was further contended that while filing the appeal, the petitioner had failed to adequately explain his financial incapacity before the Appellate Authority and therefore sought an opportunity to place the relevant material on record by filing a separate application requesting waiver of the pre-deposit requirement.

The State opposed the plea, contending that Section 107(6) clearly mandates payment of the prescribed pre-deposit before an appeal can be entertained and leaves no discretion with the Appellate Authority. Despite this statutory position, the petitioner requested the Court to permit him to demonstrate his exceptional financial circumstances before the appellate forum.

Issue:

Whether a taxpayer who is unable to comply with the mandatory pre-deposit requirement under Section 107(6) of the CGST Act due to genuine financial incapacity can be permitted to approach the Appellate Authority with an application explaining such financial hardship for appropriate consideration?

Held That:

The Gujarat High Court, considering the peculiar facts and circumstances of the case, granted the petitioner one opportunity to file an application before the Appellate Authority explaining his financial hardship and inability to make the mandatory pre-deposit. The Court directed that, if such an application is filed, the Appellate Authority shall consider the petitioner’s plea in accordance with law. However, the Court was careful to clarify that the order was passed solely on the unique facts of the present case and shall not be treated as a precedent.

Thus, while the High Court did not dilute the statutory mandate contained in Section 107(6), it ensured that the petitioner’s claim of genuine financial incapacity receives due consideration before the appellate forum rather than being rejected outright on technical grounds.

Case Name: Ratanlal Manikchand Tailor Proprietor Of M/s. Purvaj Sales Versus State of Gujarat & Ors. dated 16.07.2026

To read the complete judgement 2026 Taxo.online 2007