The Goods and Services Tax Appellate Tribunal (GSTAT), Agra Bench, has held that an appeal filed under the GST appeal amnesty scheme cannot be rejected as time-barred solely because the taxpayer paid the entire mandatory pre-deposit through the electronic credit ledger instead of paying the prescribed portion through the electronic cash ledger.

The Bench of Ajeet Singh (Judicial Member) and Vivek Kumar (Technical Member) has observed that a shortfall or misallocation in the cash component of the pre-deposit is a curable defect. It also observed that technical glitches on the GST portal cannot prejudice a taxpayer’s statutory remedy of appeal.

Buy Now: 160+ GST E-Magazine September 2026

The bench set aside the first appellate authority’s rejection order and granted the taxpayer 30 days from receipt of the Tribunal’s order to pay the deficient cash component. Restoration of the first appeal was made subject to this compliance.

The dispute arose from an adjudication order dated February 26, 2022, passed by the Deputy Commissioner, State Tax, Division-6, Mathura.

Although the ordinary period for filing an appeal under Section 107 of the Central Goods and Services Tax Act, 2017, had expired, the taxpayer filed its first appeal on January 31, 2024, invoking the appeal amnesty scheme introduced through Notification No. 53/2023 dated November 2, 2023.

The scheme permitted eligible delayed appeals to be filed up to January 31, 2024, subject to specified payment conditions. These included payment of admitted liabilities and a pre-deposit equal to 12.5% of the remaining disputed tax, subject to the prescribed ceiling. At least 20% of that pre-deposit—equivalent to 2.5% of the disputed tax—was required to be paid through the electronic cash ledger.

The taxpayer, however, paid the entire 12.5% pre-deposit through the electronic credit ledger.

The first appellate authority registered the appeal as defective and fixed a hearing. According to the Tribunal’s account, neither the taxpayer nor its authorised representative appeared on the scheduled date. The authority subsequently dismissed the appeal as time-barred by an order dated September 25, 2024.

The taxpayer challenged that rejection before the Tribunal under Section 112 of the CGST/UPGST Act.

The taxpayer argued that it had made a bona fide attempt to avail itself of the amnesty scheme within the extended deadline.

Its counsel submitted that technical difficulties on the GST portal prevented payment of the requisite portion through the electronic cash ledger. Consequently, the entire 12.5% pre-deposit was debited from the electronic credit ledger.

The taxpayer’s case was that the full pre-deposit had been secured, and difficulty in selecting the prescribed ledger should not defeat its right to have the appeal considered.

The department opposed the appeal, contending that the cash-payment requirement was an express condition of the amnesty scheme. It argued that the taxpayer’s failure to pay 2.5% of the disputed tax through the electronic cash ledger meant that it had not complied with the conditions necessary to obtain the benefit of the extended appeal deadline.

The Tribunal considered whether an appeal under the amnesty scheme could legally be rejected as time-barred solely because the pre-deposit had been debited from the electronic credit ledger instead of the electronic cash ledger.

It also examined whether technical glitches preventing strict compliance with the prescribed ledger selection could prejudice the taxpayer’s statutory remedy of appeal.

The Tribunal observed that the taxpayer had filed its appeal on January 31, 2024, and had paid the entire pre-deposit through the electronic credit ledger. It recorded the taxpayer’s explanation that a technical problem prevented payment of the required portion through the cash ledger.

The Bench stated that a taxpayer cannot be made to suffer because of technical glitches or system errors on the official portal.

It further held that a shortfall or misallocation in the cash component of a pre-deposit is capable of being corrected. Once the technical issue was raised, the appellate authority should have provided an opportunity to make good the deficient cash payment or rebalance the ledger debits.

The Tribunal therefore found that summary rejection of the appeal as time-barred, without allowing the defect to be rectified, was unsustainable. TRISHUL ASPHALT PRODUCTS

In its reasoning, the Tribunal relied on the Patna High Court decisions in M/s Friends Mobile v. State of Bihar and Othersand M/s Raiyan Traders v. Assistant Commissioner.

As described in the Tribunal’s order, those decisions supported consideration of appeals on merits where disputes concerned payment of the pre-deposit through the electronic credit ledger or procedural requirements concerning ledger segregation.

The departmental representative cited the Patna High Court’s decision in Flipkart Internet Pvt. Ltd. in support of the contrary position. The Tribunal recorded that the High Court’s verdict had been challenged before the Supreme Court and stayed, with the outcome pending. On that basis, it did not accept the department’s reliance on that decision.

The Tribunal allowed the appeal and set aside the first appellate authority’s order dated September 25, 2024.

It granted the taxpayer 30 days from receipt of its order to pay the shortfall cash component, representing 20% of the pre-deposit amount, through the electronic cash ledger.

Upon that payment, the corresponding excess amount debited from the electronic credit ledger is to be recredited in accordance with law.

Subject to compliance, the first appellate authority was directed to admit the appeal and decide it afresh on merits after granting a fair opportunity of hearing to both the taxpayer and the department. Each side was directed to bear its own litigation costs. 

The ruling treats incorrect allocation of the pre-deposit between the electronic credit and cash ledgers as a rectifiable procedural defect in the circumstances of this case.

The Tribunal did not waive the mandatory cash component or decide the underlying tax dispute. Its relief preserves the taxpayer’s opportunity to pursue the first appeal, conditional upon payment of the cash shortfall within the stipulated period.

Membership Required to Access Case Details & Order Copy

To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.

Read More: GST Credit Can’t Be Denied Merely Because Supplier Later Turns Non-Existent: GSTAT