No 10% Pre-Deposit for Show Cause Notices Issued Before October 1, 2025

This ruling is critical for taxpayers facing large penalty-only orders under Section 122(1A) where SCNs predate 01.10.2025 — the 10% pre-deposit requirement (which could run into crores) does not apply to them. Businesses and individuals in similar situations should carefully document the SCN date relative to 01.10.2025 to assert this protection before the Appellate Authority. Going forward, any SCN issued on or after 01.10.2025 for penalty-only proceedings will attract the mandatory 10% pre-deposit, making early financial provisioning essential. Counsel should proactively raise the temporal applicability argument at the appeal stage to avoid rejection on pre-deposit grounds.