Decided 18 September 2026 (interim order). The Hyderabad Bench of GSTAT has admitted an appeal against penalties of over ₹30 crore without any pre-deposit, holding that the proviso to section 112(8), which requires 10% of penalty in penalty-only appeals from 01.10.2025, does not apply where the proceedings began with an SCN issued in 2021.
Case at a glance
| Case | Hero Wiretex Ltd. v. Commissioner of CGST, Hyderabad-1 & Ors. |
| Forum | GSTAT, Hyderabad (Court II) |
| Appeal No. | APL/456/HYD/2026; Interim Order No. 001/HYD/Court Hall-II/2026 |
| Date of order | 18 September 2026 |
| Penalty | ₹30,34,69,718 under section 122 |
| Key provision | Proviso to section 112(8) (effective 01.10.2025) |
| Result | Registry's pre-deposit objection set aside; appeal admitted |
Facts of the case
After a DGGI investigation into alleged ITC without receipt of goods and invoices without supply, an SCN dated 24.12.2021 was issued. The adjudicating authority dropped the tax demand but imposed penalties of ₹30.34 crore; the first appeal was dismissed on 31.10.2025.
The appellant filed its second appeal on 29.03.2026 without pre-deposit. The Registry raised a defect.
Issue before the Tribunal
Does the 10% pre-deposit for penalty-only orders, introduced from 01.10.2025, apply to appeals arising from proceedings started before that date?
What the Tribunal held
- A right of appeal is a substantive right that vests when proceedings begin (Hoosein Kasam Dada, Supreme Court). A new burden cannot be applied retrospectively without clear words.
- Following the Delhi High Court in Gaurav Jain on the identical amendment to section 107(6), proceedings that began before 01.10.2025 are governed by the earlier law even if the appeal is filed later.
- The lis here began with the SCN of 24.12.2021, when no pre-deposit was required for penalty-only cases. The Registry's objection was set aside and the appeal admitted.
- The challenge to DGGI's jurisdiction under section 122 was left for the final hearing.
Practical takeaways for taxpayers
- If your penalty-only case arises from an SCN issued before 01.10.2025, cite Gaurav Jain and this order to avoid the 10% pre-deposit.
- For SCNs issued after 01.10.2025, budget for the 10% pre-deposit on penalty in both first and second appeals.
- Interim orders on admission do not decide merits; prepare the main case fully.
Frequently asked questions
Is pre-deposit required for a GST appeal against penalty alone?
For proceedings started on or after 01.10.2025, yes, 10% of the penalty. For older proceedings, GSTAT Hyderabad and the Delhi High Court say no.
Which date matters, the order or the SCN?
The Tribunal held the date the lis began, i.e. the SCN, determines the applicable law.
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This summary is based on the order of the GST Appellate Tribunal, Hyderabad (Court II), Interim Order No. 001/HYD/Court Hall-II/2026 in Appeal No. APL/456/HYD/2026. It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.