The Delhi High Court has held that the 10% pre-deposit requirement under the amended Section 107(6) of the CGST Act does not apply to show cause notices issued before October 1, 2025. This decision clarifies the rights of taxpayers regarding pre-deposit conditions.
Delhi HC Rules No 10% Pre-Deposit for Pre-October 2025 SCNs
The Delhi High Court recently ruled that the requirement for a 10% penalty pre-deposit under substituted Section 107(6) of the CGST Act does not extend to show cause notices (SCNs) issued prior to October 1, 2025. This decision has significant implications for taxpayers who received SCNs before this date.
The Court emphasized that the amendment to Section 107(6) was not intended to apply retrospectively. By establishing that the date of the SCN governs the applicability of the pre-deposit requirement, the Court has provided clarity in the interpretation of this section. The decision acknowledges taxpayers' rights and reinforces the protection of their interests where the legislative amendments are concerned.
This ruling is significant for practitioners as it affects the approach towards compliance and pre-deposit requirements in the GST landscape. Tax professionals should take note of the timelines involved and assess the implications for ongoing and future litigations involving SCNs.
Citations
- Delhi HC (2026) 1 GST Reporter 123
