In a recent order dated July 16, 2026, the Gujarat High Court addressed a case involving Ratanlal Manikchand Tailor, the proprietor of M/s Purvaj Sales, who faced difficulties in paying a ₹19 lakh GST pre-deposit required under Section 107(6) of the CGST Act, 2017. Tailor approached the court seeking permission to have the Appellate Authority consider his financial inability to make this pre-deposit as a condition for filing an appeal.
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Tailor argued that he was experiencing financial hardship and was unable to arrange the pre-deposit. The State contended that Section 107(6) clearly mandates the pre-deposit for filing an appeal, and Tailor had not justified a waiver in his appeal memo. Considering the unique circumstances, the High Court decided to allow Tailor an opportunity to present his financial situation to the Appellate Authority.
The court permitted Tailor to submit an application to the Appellate Authority detailing his financial incapacity. The Authority was instructed to consider this application in accordance with the law. The court emphasized that this decision was specific to the case's peculiar facts and should not set a precedent for routinely waiving statutory pre-deposit requirements.
With this direction, the High Court concluded the petition, leaving the assessment of Tailor's financial incapacity to the Appellate Authority's discretion.
Order Date - 16 July 2026
Parties: Ratanlal Manikchand Tailor, Proprietor of M/s Purvaj Sales Vs State of Gujarat & Ors.
Facts -
- Ratanlal Manikchand Tailor, proprietor of M/s Purvaj Sales, approached the Gujarat High Court in a GST matter concerning the statutory pre-deposit required for filing an appeal under Section 107(6) of the CGST Act, 2017.
- The petitioner submitted that he was facing financial crunch and was unable to arrange the required ₹19,00,000 pre-deposit. He sought permission to approach the Appellate Authority for waiver of the pre-deposit condition.
- The petitioner had been unable to justify the waiver of pre-deposit in his appeal memo. On the other hand, the State argued that Section 107(6) was clear and that the appeal could not be filed without the prescribed pre-deposit.
- The High Court, considering the peculiar facts, decided to give the petitioner an opportunity to explain his pecuniary condition/financial incapacity before the Appellate Authority.
Issue -
- Whether the petitioner, citing financial incapacity to make the ₹19 lakh pre-deposit mandated under Section 107(6) of the CGST Act, could be given an opportunity to seek consideration of such inability by the Appellate Authority.
Order -
- The Court observed that, in the peculiar facts of the case, the petitioner deserved one opportunity to explain his financial condition and inability to make the pre-deposit required under Section 107(6) of the CGST Act.
- The Court permitted the petitioner to file an application before the Appellate Authority explaining his financial incapacity. The Authority may consider that application in accordance with law.
- Importantly, the Court clarified that its direction was based on the peculiar facts of the present case and should not be treated as a precedent for routinely waiving the statutory pre-deposit requirement.
- With this direction, the High Court disposed of the petition, leaving the question of the petitioner's financial incapacity to be considered by the Appellate Authority.
