GST: High Court Allows Appeal Against Form 26AS Based Assessment, Recognises Pre-Deposit Made During Writ Proceedings

A company named M/s Jaymeet Reality Private Limited challenged a tax order and asked the court to cancel it, but the court said they need to deposit a certain amount of money as security before going ahead with an appeal. The petitioner deposited the amount, so now the court is letting the appeal process proceed and instructs the authorities to decide the appeal fairly and quickly.

The company, Jaymeet Reality Private Limited, filed a case under Article 227 of the Constitution of India, which allows a High Court to supervise lower courts or authorities. Requesting the high court to quash a show-cause notice dated July 20, 2024, and August 2, 2024, and an Order-in-Original dated December 31, 2024, which was passed against them by the authorities. Also, temporarily pause the implementation and execution of that December 31 order while their petition is pending, and prevent the second respondent from taking any steps to enforce certain purchase orders.

The petitioners challenged the show-cause notices dated July 20, 2024, and August 2, 2024, saying that the tax authorities did not have the right to start proceedings based on information received from Form 26AS. The company alleged that the tax authorities for wrongly recalculated their “revenue from operations” using details from Form 26AS. After filing the petition, the tax authorities issued the Order-in-Original on December 31, 2024, which the petitioners then also challenged by amending their petition.

The lawyer of the company said that the company is willing to deposit Rs. 6,98,898 as a pre-deposit to challenge the Order-in-Original. This amount represents 10% of the alleged suppressed turnover (Rs. 2.20 crores) in addition to related tax and other amounts mentioned in the order. The total disputed amount involves multiple components (suppressed turnover for the years 2018-19 to 2020-21, tax dues, excess Input Tax Credit availed, and tax not paid on reverse charge). They also clarified that a separate amount of Rs. 2.28 crores mentioned in the order is excluded from this deposit because it relates to an issue already settled in earlier litigation.

The government’s lawyer agreed that if the petitioners deposit Rs. 7 lakhs as a pre-deposit, the Commissioner of Appeals will consider their appeal. The court adjourned the matter initially to allow the petitioners to deposit Rs 7 lakhs.

When the case was taken up again on July 18, 2025, the company’s lawyer informed the court that the company had already deposited Rs. 7 lakhs into the electronic cash ledger on July 2, 2025, through two challans of Rs. 2,77,788 and Rs. 4,22,212. The court verified that the deposit was reflected in the electronic ledger.

Because the petitioners complied with the deposit condition, the court decided not to decide the petition on its merits (the actual legal issues involved) at this stage. Instead, the court gave the petitioners the liberty to file an appeal before the first Appellate Authority within four weeks.

The Appellate Authority is directed to entertain the appeal without requiring any further pre-deposit since Rs 7 lakhs has already been deposited.

The appeal must be heard and decided on merits (the substantive issues) within 12 weeks from the date the appeal is received, giving the petitioners a fair opportunity to present their case. The court explicitly stated that it has not examined the merits of the case and that the appeal must be decided according to the law.

Finally, the court disposed of the petition and discharged the notice.