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.