Deepak Kumar Vs State of Himachal Pradesh and Anr. (Himachal Pradesh High Court)
GST Demand and Delayed Appeal
The Himachal Pradesh High Court considered a petition challenging a DRC-07 final order dated 21.06.2025 passed under Section 74 of the GST Act, raising an additional demand of Rs.28,54,142/- against the petitioner.
The order was appealable under Section 107 of the GST Act, but the petitioner had not filed an appeal within the prescribed limitation period and approached the High Court belatedly. The petitioner stated that the tax liability was approximately Rs.12 lakh, with the remaining demand comprising interest and penalty.
The State submitted that the petitioner was liable for interest and penalty because of delayed payment and continuation of business after cancellation of the registration certificate. It stated that, considering the petitioner’s conduct, the penalty had been increased from 25% to 100%, supporting the total demand of Rs.28,54,142/-.
Appeal Permitted Subject to Deposit
Although the petitioner had failed to file the statutory appeal within limitation, the High Court permitted the petitioner to file an appeal under Section 107, subject to depositing 50% of the demanded amount, namely Rs.14,27,071/-, with the department or authority within 30 days. The deposit was made subject to the final outcome of the appeal.
The appellate authority was directed to entertain the appeal within 30 days and decide it on merits rather than dismissing it as time barred, preferably within two months after filing.
The authority was also directed to consider the petitioner’s request for release of the bank account after the stipulated deposit, during pendency of the appeal, independently and on merits. The petition and pending miscellaneous applications were disposed of accordingly.
FULL TEXT OF THE JUDGMENT/ORDER OF HIMACHAL PRADESH HIGH COURT
Notice. Mr. Sushant Keprate, Additional Advocate General, Advocate, appears, waives and accepts service of notice on behalf of respondents-State.
2. Petitioner has approached this Court for quashing of DRC07 final order dated 21.06.2025, passed by competent authority under Section 74 of GST Act, whereby additional demand of Rs. 28,54,142/- has been held to be liability to be paid by the petitioner.
3. The impugned order is an appealable order under Section 107 of GST Act and the petitioner had alternative efficacious remedy, but it did not do so, rather present petition has also been filed at a belated stage. According to petitioner, tax liability is only about Rs. 12,00,000/- and remaining component is amount of interest and penalty.
4. Learned Additional Advocate General has placed on record instructions dated 24.07.2026 with submission that though tax amount is about Rs. 12,00,000/-, but for the delayed payment and continuation of the business after cancellation of registration certificate, petitioner has become liable to pay interest and penalty and in given conduct of petitioner, penalty has been increased from 25% to 100% and, therefore, he has justified the additional demand of Rs. 28,54,142/-.
5. Admittedly, petitioner has failed to prefer appeal within limitation period.
6. However, after hearing the parties, petitioner is permitted to file appeal under Section 107 of GST Act, subject to deposit of 50% of the amount demanded, i.e., Rs. 14,27,071/- with the department/authority within 30 days from today. The deposit shall be subject to final outcome of the appeal.
7. Appellate authority is also directed to entertain the appeal proposed to be preferred by the petitioner within 30 days from today and to decide the same on its own merits instead of dismissing it as a time barred appeal as expeditiously as possible, preferably within two months after filing of the appeal.
8. Appellate authority is also directed to consider the prayer of the petitioner to release bank account of the petitioner, after depositing of aforesaid amount, during pendency of the appeal, without being influenced by this order but on merits of the plea.
9. Petition is disposed of, so also the pending miscellaneous application(s), if any, in aforesaid terms.
Notes:
1 Whether the reporters of the local papers may be allowed to see the judgment?
