Deposit made ‘Under Protest’ cannot be treated as Voluntary Payment: Himachal Pradesh HC Quashes GST Orders [Read Order]

The High Court of Himachal Pradesh remanded a matter wherein the deposit made under protest was treated as a voluntary deposit. The Goods and Services Tax orders passed prematurely have been quashed.

The facts show that the Assistant Commissioner Sales Taxes and Excise, Sarahan, Circle Sirmour, South Zone, Shimla, Himachal Pradesh issued a notice to petitioner dated 28.09.2023 for recovery of GST and IGST, amounting to INR 18,58,538/-. The petitioner initially asked for more time to submit a detailed reply and submitted that the tax demanded was deposited under protest. The petitioner then filed a detailed reply on 30.11.2023.

The Assistant Commissioner then passed an order on 19.12.2023 wherein the deposit made under protest was treated as a voluntary deposit without taking into consideration the detailed reply and the documents filed. The operative clause read:

“This has reference to the show cause notice referred to above. As you have paid the amount of tax and other dues mentioned in the notice along with applicable interest and penalty in accordance with the relevant provisions of Act, the proceedings initiated vide the said notice are hereby concluded.”

The Additional Commissioner, on appeal, disposed of it noting Section 73(8) on 22.07.2025. The High Court observed that the Assistant Commissioner had made the mistake of treating the deposit as voluntary deposit and concluding the notice.

Finally, the two member bench of Vivek Singh Thakur and Ranjan Sharma, held that the orders dated 19.12.2023 and 22.07.2025 are to be quashed and the matter is to be remanded back to Assistant Commissioner for adjudication on merit in accordance with the law, after giving due opportunity of hearing to the petitioner.

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