Bombay HC says Excess Appeal Pre-Deposit Must Be Refunded Once Demand Attains Finality

The Bombay High Court directed the Department to refund ₹19,61,750 representing the excess pre-deposit retained after the demand against Mihika Pharmaceuticals was reduced to ₹5,648 and the balance was paid. Relying on its earlier decision in IBM India Private Limited, the Court reiterated that an amount deposited as a statutory condition for hearing an appeal bears the character of a security deposit and not duty. Once the rectification order attained finality and the surviving demand was discharged, the Department could not continue to retain the excess amount. The refund rejection order was quashed and the Department directed to disburse the refund.