Madras HC: No requirement of 10% Pre-Deposit on Penalty where Tax stands paid

Madras High Court held that the requirement to pre-deposit 10% of the penalty under the proviso to Section 107(6) of CGST Act, 2017, applies only where the order demands penalty “without involving any demand of tax.” Since the adjudication order had confirmed tax, interest and penalty, and the tax and interest had already been paid, the subsequent DRC-07 issued only for the unpaid penalty did not attract the 10% pre-deposit requirement. The Court accordingly set aside the rejection of the appeal for non-payment of the penalty pre-deposit and restored the appeal for adjudication on merits.

Kappa Chakra Kandhari Foods vs. Commissioner of GST and CE - Madras HC (Sept 7, 2026).pdf