A Division Bench of the Delhi High Court has held that the amended pre-deposit requirement under Section 107(6) of the CGST Act, effective from 1 October 2025, does not apply to GST appeals arising out of show cause notices issued before that date, even where the adjudication order itself was passed afterward.
The ruling came in a batch of matters, the lead case involving an aggregate demand of approximately Rs. 227.72 crore arising from a DGGI investigation into alleged fake invoicing and fraudulent input tax credit claims in the iron and steel trading sector. The petitioners argued that applying the amended, more stringent pre-deposit regime to appeals rooted in proceedings that began well before the amendment came into force would unfairly and retrospectively burden them with a heavier pre-condition for accessing the appellate forum than existed when the dispute originally arose.
The Court agreed, holding that the right of appeal is a substantive, vested right that accrues on the date the underlying proceedings are initiated, that is, the date of the show cause notice, rather than on the date the appeal itself comes to be filed. Since the substantive right had already vested under the pre-amendment regime when the show cause notices in these cases were issued, the Court held the taxpayers were entitled to apply the more favourable pre-amendment pre-deposit rule when filing their appeals, regardless of how much later the adjudication order or the appeal followed.
The decision provides a clear, principled cut-off for businesses navigating the transition between the old and amended pre-deposit regimes: what matters is the date the show cause notice was issued, not the date of the adjudication order or the date the appeal is eventually filed.