Percentage-Based Pre-Deposit U/S 112(8)(b) CGST Act Does Not Extend To Disputed Interest Alone When Entire Tax Is Paid: Bombay High Court

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Published 2 November 2026

Case: Not provided in source
Court: Bombay High Court
Bench: Not provided in source
Citation: Not provided in source
Statutes: Central Goods and Services Tax Act, 2017 — s.112(8)(b), s.112(9)
Source: Verdictum

Bottom Line Up Front (BLUF)

The Bombay High Court quashed bank recovery notices for ₹22.12 crore interest, holding that the percentage-based pre-deposit requirement under Section 112(8)(b) of the CGST Act does not apply to disputed interest alone when the entire tax has already been paid. The Court found the notices to be "in the teeth of" Section 112(9) of the CGST Act.

Ratio Decidendi · Legal Principle Established

The percentage-based pre-deposit requirement under Section 112(8)(b) of the Central Goods and Services Tax Act, 2017, for filing an appeal, does not extend to disputed interest when the entire tax amount has already been paid. Recovery proceedings for such disputed interest without a final determination are contrary to Section 112(9) of the CGST Act.

Practice & Procedural Impact for Advocates

Advocates should argue that pre-deposit for appeals under CGST Act Section 112(8)(b) is not required for disputed interest if the principal tax is paid. Litigants facing recovery for disputed interest without a final appeal decision can challenge such notices as contrary to Section 112(9) of the CGST Act.

Key Legal Takeaways

1Section 112(8)(b) CGST Act pre-deposit applies to tax, not solely to disputed interest.
2Recovery of disputed interest without appeal finality violates Section 112(9) CGST Act.
3The Court did not rule on the merits of the interest or refund claim.

The Legal Issue The Bombay High Court addressed whether the percentage-based pre-deposit requirement under Section 112(8)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act) extends to disputed interest alone when the entire tax amount has already been paid. The case involved bank recovery notices issued for ₹22.12 crore in interest.

Court's Reasoning The Bombay High Court held that the pre-deposit requirement stipulated in Section 112(8)(b) of the CGST Act is applicable to the disputed tax amount, not solely to disputed interest when the principal tax has already been paid. The Court found that the recovery notices issued for the interest amount were "in the teeth of" Section 112(9) of the CGST Act. Section 112(9) provides that where the appellant has paid the amount under sub-section (8), the recovery proceedings for the balance amount shall be deemed to be stayed. By issuing recovery notices for disputed interest without a final determination, the authorities acted contrary to this provision. The Court explicitly stated that it was not delving into the merits of the interest claim or the ₹80 crore refund claim, leaving these issues open for future determination.

What Follows The Bombay High Court quashed the bank recovery notices for ₹22.12 crore interest. The merits of the interest dispute and the ₹80 crore refund claim remain open for adjudication by the appropriate authorities.