GST: High Court Allows Belated Appeal Against Section 73 Demand; Permits Filing Within 15 Days Subject to Pre‑Deposit

GST: High Court Allows Belated Appeal Against Section 73 Demand; Permits Filing Within 15 Days Subject to Pre‑Deposit

Numerous times, taxpayers are not aware of the notices uploaded on the online portal; therefore, not replying to them timely manner results in a high penalty amount. In these cases, the question arises of whether these taxpayers should be given another chance or if it is their mistake.

The company, Tvl. Sastha Rice Mill (petitioner) filed a writ petition in the Madras High Court under Article 226 of the Constitution of India, requesting a “Writ of Certiorarified Mandamus.” Meaning the petitioner is requesting the court to quash an order passed by a government authority and to direct the authority to take action in the proper legal manner after giving them a fair chance to represent their side.

The petitioner here is challenging a tax order dated 25.11.2024, issued by the State Tax Officer under the Goods and Services Tax (GST) Act, related to the financial year 2020-21. The company argues that the initial order was uploaded only on the GST portal in Form GST DRC-07, with the reference number ZD330225283163N. Hence, they were not aware of it and could not answer it timely. Further, it says, before receiving the notice, the company had already paid Rs. 1,92,276 on 18.08.2021. However, the final tax demand raised by the officer was Rs. 10,38,162, consisting of interest, penalty, and late fees; the total amount due became around Rs. 19,21,825.

According to the GST rules, the company could have filed an appeal under Section 107 of the GST Act by 26.04.2025, and if delayed, they could have applied for condonation of delay up to 26.06.2025. However, the company did not apply for any of them; in legal terms, it is called “sleeping over the right.”

The company directly approached the High Court when the department took harsh action against them, such as attaching the petitioner’s bank account through a DRC-13 notice on 03.06.2025 and actual account attachment on 27.06.2025. On this point, the company argued that they were not aware of the tax order uploaded only on the GST portal. Therefore, could not answer it or raise an appeal against it earlier.

Hearing both sides, the high court ruled that the company should be awarded a second chance to file an appeal with the GST Appellate Authority. The company must file the appeal within 15 days from the date it receives a copy of this High Court order. The appeal must be filed along with the required pre-deposit, which is usually 10% of the disputed tax amount, i.e., Rs. 10,38,162. If this is done, the Appellate Authority must accept the appeal and consider it on its merits, ignoring the delay in filing. Additionally, the petitioner is allowed to argue that they have already paid Rs. 192,276 earlier, and that amount should be taken into account in the appeal.