Concept of pre-deposit :
As mentioned earlier, the right to appeal is a statutory right which operates within the limitations placed on it by the law. One such limitation flows from the principle that an appellant must first deposit the adjudged dues before his further appeal can be heard. However, often an appellant may succeed in his appeal, and hence it would (in retrospect) be unfair to saddle him with this financial burden. To balance these factors, tax laws mandate some “pre-deposit” so as to discourage frivolous appeals and also safeguard the bonafide interests of both the taxpayers and the revenue.
Section 79(6) for CGST and 79(4) for SGST require an appellant before FAA to pre-deposit 10% of the “amount in dispute” arising from the order appealed against. The phrase “amount in dispute” has been defined to include:- (i) amounts determined under section 46 (assessment of non-filers), or 47 (assessment of unregistered persons) or 48 (summary assessment) or 51(demands); (ii) amounts payable under rule——-of the GST Credit Rules 201…; and (iii) amounts of fee levied or penalty imposed.
The above requirement of pre-deposit of 10% of the amount-in-dispute is common to both CGST and SGST. However, the SGST law has two additional features :-
• Full pre-deposit of the admitted amount of tax, interest, fine, fee and penalty arising from the impugned order.
• The department can apply to the FAA for ordering a higher amount of predeposit, not exceeding 50% of the amount in dispute, in a “serious case” (i.e. a case involving a disputed tax liability of not less than Rs. 25 crs. and where the Commissioner is of the reasoned recorded opinion that the department has a very good case against the taxpayer).
The pre-deposit provisions for appeals before the Tribunal are similar to the above and are contained in Section 82 (See Appendix).
Section 85 provides for interest on refund of pre-deposit. If the pre-deposit made by the appellant under section 79 (FAA) or under section 82 (Tribunal) is required to be refunded consequent to any order of the FAA or of the Tribunal, as the case may be, interest at the specified rate shall be payable from the date of payment of the amount till the date of refund of such amount.