The Goods and Services Tax Appellate Tribunal (GSTAT), State Bench at Raipur, has allowed an appeal to proceed after the taxpayer subsequently discharged its admitted tax liability, interest and penalty. The Tribunal treated the date of complete payment as the legally effective filing date and condoned the resulting 55-day delay.

The Bench of Pradeep Kumar Vyas (Judicial Member) and Chandra Bhushan Singh (Technical Member) has observed that failure to pay admitted tax dues before presenting an appeal does not make the appeal incurably non-maintainable. However, the appeal becomes duly filed only when the mandatory payment requirement is fully satisfied, and any resulting delay must qualify for condonation under the statute.

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The bench emphasised that it cannot waive the payment requirement, but recognised the legal effect of its subsequent fulfilment.

The first appellate authority rejected that appeal as barred by limitation through a reasoned order dated December 16, 2024. FORM GST APL-02 recording the rejection was generated on January 17, 2025.

The company subsequently approached the Chhattisgarh High Court. By an order dated April 2, 2025, the High Court granted it liberty to pursue the remedy under Section 112 upon constitution of the Tribunal, subject to the statutory deposit and a decision in accordance with law.

The company thereafter approached GSTAT. During those proceedings, the department raised a preliminary objection that the company had not paid the liability it had itself admitted. D AND 

The department pointed out that the company had admitted ₹8,573 towards an input tax credit mismatch and ₹1,90,047 towards the net difference between GSTR-1 and GSTR-3B, aggregating to ₹1,98,620.

According to the department, this admitted amount, together with consequential interest and penalty, had not been discharged before filing the Tribunal appeal.

At the hearing on September 8, 2026, the company acknowledged the deficiency and sought time to rectify it. The Tribunal allowed it to place proof of payment on record and submit an application explaining the delay.

On September 14, 2026, the company paid admitted tax of ₹1,98,620, interest of ₹3,04,932 and penalty of ₹19,862, totalling ₹5,23,414, through FORM GST DRC-03/DRC-03A. The amounts were adjusted against the respective liabilities.

The company attributed the omission to inadvertence and sought acceptance of the payment and condonation of the resulting delay. 

At the hearing on September 22, 2026, the department raised another objection. A further component of the liability treated by the company as admitted had earlier been adjusted against Cess credit rather than deposited under the appropriate CGST and SGST heads.

The company sought time to verify and correct the position. The Tribunal permitted it to furnish proof of compliance by September 24, 2026.

The company subsequently paid additional tax of ₹31,420, interest of ₹48,644 and penalty of ₹3,142, aggregating to ₹83,206. The additional challan was dated September 23, while FORM GST DRC-03/DRC-03A and the adjustment against the respective liabilities were dated September 24.

The Tribunal therefore identified September 24, 2026, as the date on which complete compliance with the mandatory payment requirement occurred. 

The Tribunal held that Section 112(8)(a) mandates full payment of the admitted amount of tax, interest, fine, fee and penalty arising from the impugned order. This requirement operates in addition to the statutory pre-deposit under Section 112(8)(b).

Relying on the Supreme Court decisions in Vijay Prakash D. Mehta v. Collector of Customs and Narayan Chandra Ghosh v. UCO Bank, the Bench explained that a statutory right of appeal remains subject to the conditions imposed by the legislature. Neither the Tribunal nor administrative registration of an appeal can dispense with those conditions.

However, the Bench distinguished waiver of the requirement from allowing a taxpayer to actually fulfil it at a later stage.

For the effect of subsequent payment, it relied principally on Lalta Prasad Khinni Lal v. Assistant Commissioner (Judicial), Sales Tax, Kanpur. In that case, the Supreme Court recognised that an appeal accompanied by delayed payment of admitted tax became properly entertainable upon payment, with the payment date relevant for determining limitation and considering condonation.

Applying that principle, GSTAT held that the earlier physical presentation of the appeal did not constitute a duly filed appeal. Its legal filing date shifted to the date on which the mandatory payment condition was completely fulfilled. 

The Bench expressly considered the difference between the statutory wording examined in Lalta Prasad Khinni Lal and Section 112(8).

The earlier provision referred to an appeal being “entertained”, whereas Section 112(8) provides that no appeal shall be “filed” unless the prescribed amounts have been paid.

The Tribunal held that this stricter wording prevented the company from claiming its original presentation date as the valid filing date despite non-payment. Nevertheless, subsequent fulfilment of the mandatory condition made the appeal duly filed on the date of compliance.

This interpretation, the Bench reasoned, preserves the compulsory payment requirement while allowing the resulting delay to be examined under the statutory condonation provision. D AND SONS MOTORS PRIVATE LIMIT…

The order records that Notification S.O. 3502(E), dated June 30, 2026, prescribed July 31, 2026, as the last date for Tribunal appeals concerning orders communicated before May 1, 2026.

Since the company completed the required payment on September 24, the appeal became duly filed 55 days after that deadline. The Tribunal found that this fell within the further three-month period available under Section 112(6), subject to sufficient cause being established.

The Bench considered that the company had already pursued the appellate remedy and paid the prescribed statutory pre-deposit. It had also candidly acknowledged the payment deficiency and corrected both the initial omission and the further tax-head discrepancy within the time allowed.

The procedural history also weighed in its favour: the company had approached the High Court while the Tribunal was not operational and subsequently pursued the remedy permitted by that court.

Although mere inadvertence could not justify dispensing with a mandatory statutory requirement, the Tribunal found that these circumstances collectively established sufficient cause to condone the resulting delay. 

The Tribunal also addressed the company’s failure to pay admitted dues before filing its first appeal under Section 107(6)(a).

It accepted that payment was mandatory at that stage and that the first appellate authority should have ensured compliance. However, it distinguished an appeal affected by a statutory defect from the complete absence of appellate proceedings.

Referring to Mela Ram & Sons v. Commissioner of Income-tax, Punjab, the Bench observed that an appeal does not necessarily cease to be an appeal merely because it is irregular or incompetent. The relevance of that precedent was confined to the existence of appellate proceedings; it did not dilute the mandatory payment requirement.

The first appellate authority had passed a reasoned order rejecting the appeal on limitation, and that order continued to subsist. The Tribunal found no established basis to treat it as non-existent or void from inception merely because admitted dues had remained unpaid.

It also noted that the department had filed a reply but no memorandum of cross-objections seeking annulment or modification of the first appellate order on that ground. The Bench clarified that the absence of cross-objections could not validate a jurisdictionally void order, but no such nullity had been established here.

Subsequent payment, it added, did not retrospectively excuse the first appellate authority’s failure to enforce Section 107(6)(a). 

The Tribunal held that the appeal became duly filed on September 24, 2026, condoned the resulting delay under Section 112(6), and declared it maintainable.

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