GST Appeal cannot be Rejected for Minor Delay in Filing it If Pre-Deposit and Additional Amount Paid: Madras HC [Read Order]

In a recent ruling, the Madurai bench of Madras High Court held that a minor procedural delay in filing a GST appeal should not be a ground for dismissal, particularly when the petitioner has made substantial payments toward the disputed tax liability.

The case arose when the petitioner challenged an order dated 15.07.2024, which sought the reversal of input tax credit (ITC) availed for the financial year 2019-2020. The petitioner argued that the notice regarding the proceedings was uploaded in the "Additional Notices" column of the GST portal, and due to a lack of awareness, the consultant engaged by the petitioner failed to respond in time.

It was only on 16.11.2024, when the petitioner’s bank account was attached under Section 79 of the GST Act, 2017, that they became aware of the impugned order. Consequently, an appeal was filed on 20.11.2024, along with a petition for condonation of a 35-day delay under Section 107(4) of the Act.

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A 10% pre-deposit of the tax liability, amounting to Rs. 21,136, was made as required under Section 107(6) of the GST Act. Additionally, the petitioner discharged another 15% of the disputed tax amount—Rs. 8,009 under CGST and Rs. 23,696 under SGST—bringing the total payment to 25% of the disputed tax demand.

However, the appellate authority rejected the appeal solely on the ground that it was filed five days beyond the condonable period of limitation. The respondents argued that the petitioner had failed to diligently monitor the GST portal for notices and that statutory time limits must be strictly followed.

Justice Vivek Kumar Singh observed that while the appellate authority had applied the GST Act provisions strictly, a delay of 35 days in filing the appeal could be condoned in the interest of justice.

The Court pointed out that “appeal should not be dismissed merely due to a procedural delay, especially when the petitioner has made an effort to comply with the statutory requirements, including the pre-deposit of 10% of the tax liability and additional payments towards the disputed tax amount. Therefore, this Court is inclined to provide the petitioner an opportunity to present the matter on its merits before the second respondent.”

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Accordingly, the Court set aside the rejection order dated 03.01.2025 and remanded the matter back for fresh consideration, directing the appellate authority to decide the case on its merits within two months. The Writ Petition was disposed of without any order as to costs.

To Read the full text of the Order CLICK HERE

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