W.P.(C)/10353/2025 of NK SHARMA Vs ASSISTANT COMMISSIONER

*IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 10353/2025NK SHARMA.....PetitionerThrough:Dr.AshutoshandMs.Fatima,Advocates.versusASSISTANT COMMISSIONER.....RespondentThrough:Mr. Akash Panwar and Ms. JasleenKaur, Advocates.

CORAM:

JUSTICE PRATHIBA M. SINGHJUSTICE RAJNEESH KUMAR GUPTAO R R%21.07.2025

1.This hearing has been done through hybrid mode.

2.The present petition has been filed by the Petitioner - N.K Sharmaunder Articles 226 and 227 of the Constitution of India, inter alia, seekingpartial waiver of pre-deposit for sum of Rs.1,12,000/- which constitutes 2.5per cent of the penalty amount in filing the appeal before the Customs, Exciseand Service Tax Appellate Tribunal (hereinafter, ‘CESTAT’).

3.The said appeal arises out of Show Cause Notice dated 27[th]April, 2022by which certain demand has been raised against the Petitioner. The Order-in-Original dated 20[th]March, 2023 confirms the demand of service tax interms of Section 73(1) Finance Act, 1994 read with Section 174 of the CentralGoods and Service Tax Act, 2017 to the tune of Rs. 44,74,935/-. Even intereston the confirmed demand as also the penalties have been imposed upon thePetitioner.

4.The submission on behalf of the Petitioner is that 7.5 per cent of thepre-deposit has already been made and the Petitioner is not in position to

arrange the remaining 2.5 per cent. Hence, waiver may be granted to thePetitioner.5.Mr. Akash Panwar, ld. Counsel for the Respondent however relies uponthe decision of Coordinate bench of this Court in ‘Diamond EntertainmentTechnologiesvs.CommissionerCentralGoodsandServiceTaxCommissionerate Dehradun and Another’, 2019 SCC OnLine Del 12414 toargue that no such waiver of pre-deposit can be granted. In fact, this judgmentis also been followed by this Court in ‘Impressive Data Services PrivateLimited vs. Commissioner (Appeals-I), Central Tax GST’, 2025 SCCOnLine Del 2497 where it is held as under:

“7. The Court has considered the matter. The question raisedherein is whether the requirements mandated in terms ofSection 107(6) of the Act for pre-deposit can be waived ornot. Section 107(6) of the Act reads as under:

“(6) No appeal shall be filed under sub section

(1), unless the appellant has paid— (a) in full,such part of the amount of tax, interest, fine, feeand penalty arising from the impugned order, asis admitted by him; and (b) sum equal to ten percent. of the remaining amount of tax in disputearising from the said order, [subject to amaximum of twenty-five crore rupees,] in relationto which the appeal has been filed. [Provided thatno appeal shall be filed against an order undersub-section (3) of section 129, unless sum equalto twenty-five per cent of the penalty has beenpaid by the appellant]”

In terms of the above provision, insofar as theadmitted tax, interest or penalty is concerned, theentire amount would have to be deposited. In so faras the disputed amount is concerned, 10% of the-tax would have to be deposited as predepositalong with the appeal. The said provision does not,

in the opinion of this Court, give discretion forwaiver of the pre-deposit. In any event in DiamondEntertainment (supra) in the context of the ExciseAct, the Court has clearly observed as under:

“12. In Pioneer Corporation v. Union of India,(2016) 340 ELT 63, Shubh Impex v. Union ofIndia, (2018) 361 ELT 199 (Del) and ManojKumar Jha v. DRI, (2019) 365 ELT 166 (Del), thisCourt, even while dealing with cases in which theappeal had been filed before the CESTAT after 6th August, 2014, nevertheless, allowed the appealto be prosecuted on payment of partial pre-deposit, given the financial stringency in whichthe respective appellants, before it, were placed;a reading of these decisions would reveal, that theattention of this Court had not been invited to itsearlier judgment in Anjani Technoplast (supra)which set out, in clear and unambiguous terms,that every appeal, before the CESTAT, filed afterthe amendment of Section 35F/129E would bemaintainable only if mandatory predeposit weremade. xxxx 15. In view of the aforesaid merger, ofthe judgment of the Division Bench of this Courtin Anjani Technoplast (supra) with the orderpassedbytheSupremeCourtinappealthereagainst, we are bound, by Article 141 of theConstitution of India, to follow the law laid downin Anjani Technoplast (supra), in preference tothat laid down in Pioneer Corporation (supra),Manoj Kumar Jha (supra) and Shubh Impex(supra). xxxx

21. Inasmuch as the judgment in PioneerCorporation (supra), Shubh Impex (supra) andManoj Kumar Jha (supra) are contrary to thelaw laid down in Anjani Technoplast (supra) aswell as to the law laid down in Vice-Chancellor,University of Allahabad v. Dr. Anand Prakash

Mishra (supra), A.B. Bhaskara Rao v. C.B.I.(supra), Manish Goel v. Rohini Goel (supra) andState of Bihar v. Arvind Kumar (supra), none ofwhich have been noticed in the said decisions, itis not possible for us to follow the decisions inPioneer Corporation (supra), Shubh Impex(supra) and Manoj Kumar Jha (supra), onwhich learned counsel places reliance.”

8.In view of the settled legal position, the prayer for waiverof pre-deposit cannot be entertained. However, if there is anyamount lying with the Government entities which thePetitioner wishes to rely upon as being part of the pre-deposit, the Petitioner is free to make such prayer beforethe concerned Appellate Authority. It is also submitted onbehalf of the Petitioner that Rs. 20 lakhs is also lying with theDepartment out of total of Rs. 64 lakhs which is to bedeposited by the Petitioner. This submission may also bemade before the concerned Appellate Authority.”

6.In view of the above, the prayer for partial waiver of the pre-deposit isnot tenable.

7.However, in the facts and circumstances of this case, the Petitioner isgranted time till 31[st]October, 2025 to make the remaining pre-deposit.8.The petition is disposed of in the above terms. Pending applications, ifany, are also disposed of.

PRATHIBA M. SINGH, J.

JULY 21, 2025v/ck

RAJNEESH KUMAR GUPTA, J.