Trishul Asphalt Products Vs Additional Commissioner Grade 2 Appeals Mathura (GSTAT Agra)
Summary: The GST Appellate Tribunal, Agra Bench, allowed Trishul Asphalt Products’ appeal against the first appellate authority’s order dated 25 September 2024 dismissing its appeal as time-barred. The original adjudication order was dated 26 February 2022, and the taxpayer filed its first appeal on 31 January 2024 under the amnesty scheme introduced through Notification No. 53/2023-Central Tax dated 2 November 2023. The scheme required payment of admitted dues and a pre-deposit of 12.5% of the remaining disputed tax, subject to a ₹25 crore ceiling, with at least 20% of that pre-deposit payable through the electronic cash ledger. The taxpayer submitted that a technical problem on the GST portal prevented payment of the prescribed cash component, resulting in the entire 12.5% being debited from the electronic credit ledger. The first appellate authority registered the appeal as defective and dismissed it after the taxpayer failed to appear at the hearing. The Department opposed restoration, arguing that non-compliance with the cash payment condition disentitled the taxpayer to the benefit of the scheme.
The Tribunal held that technical glitches or system errors on the official portal cannot prejudice the statutory remedy of appeal. Relying on Friends Mobile and Raiyan Traders, it treated a shortfall or misallocation in the cash component as a curable defect. It rejected the Department’s reliance on the contrary Patna High Court decision in Flipkart Internet Pvt. Ltd., recording that the Supreme Court had stayed the verdict and the matter remained pending. The Tribunal concluded that the first appellate authority should have afforded an opportunity to make good the differential cash payment or rebalance the ledger debits rather than summarily dismissing the appeal. It set aside the appellate order and granted 30 days from receipt of its order to pay the shortfall cash component, representing 20% of the pre-deposit amount. Upon payment, the corresponding excess debit from the electronic credit ledger was 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 giving both sides a fair hearing. The underlying tax dispute was left for that fresh decision.
Cases Discussed
- M/s Raiyan Traders Vs State of Bihar & Ors.; CWJC No. 12994 of 2024; 06/09/2024 (Patna High Court). Referred to in paragraph 11 as “M/s Raiyan Traders vs Assistant Commissioner”; relied upon for consideration of the appeal on merits despite the dispute concerning the ledger used for pre-deposit.
- M/s Friends Mobile Vs State of Bihar & Ors.; CWJC No. 6457 of 2023; 06/12/2023 (Patna High Court). Relied upon in addressing rejection of an appeal on grounds concerning payment of pre-deposit through the electronic credit ledger.
- M/s Flipkart Internet Pvt. Ltd. Vs State of Bihar & Ors.; CWJC No. 1848 of 2023 and analogous cases; 19/09/2023 (Patna High Court). Cited by the Department for the contrary position; the Tribunal declined to accept that argument in view of the Supreme Court stay recorded in the supplied order.
FULL TEXT OF THE ORIGINAL GSTAT JUDGMENT/ORDER
1. Present appeal has been preferred u/s 112 of Central Goods and Services Tax, Act, 2017/ Uttar Pradesh Goods and Services Tax, Act, 2017 (for short CGST/UPGST, Act) against order dated- 25.09.2024, passed by first appellate authority in appeal no. D-93/2024, year 2021, vide which application moved by appellant/taxpayer u/s 107(11) CGST/UPGST, Act was dismissed resulting dismissal of appeal as barred by limitation prescribed for. Hereinafter in the order, appellant and respondent will be addressed as taxpayer and department, respectively.
2. Facts giving rise to present appeal in nutshell are, that proper officer/ Deputy commissioner state tax, divison-6, Mathura, had passed order dated 26.02.2022, against taxpayer. Initially first appeal u/s 107 of CGST/UPGST, Act, should have been filed within three months form the communication of the Order-in-Original. Taxpayer has filed first appeal on 31.01.2024, in view of amnesty scheme of Central Government launched with the notification no. 53/2023, issued by Central Board of Indirect Taxes and Customs.
3. Learned first appellate authority had registered the first appeal as defective one and fixed the date for hearing. On such date of hearing taxpayer had not appeared either in person or through his authorized representative and learned first appellate authority disposed off such defective appeal by dismissing the same.
4. Learned counsel appearing for taxpayer has submitted that as per notification issued under amnesty scheme, first appeal might be submitted till 31.01.2024, even if period of limitation has already been elapsed subject to payment of tax, interest, fine, fee and penalty arising from the impugned order, as it admitted by taxpayer, further it was provided by such scheme that a sum of equal to twelve and a half percent of the remaining amount of tax in dispute arising form the same order, subject to a maximum of 25 crore rupees in relation to which the appeal has been filed, out of which amount at least 20% should have been paid by debiting from the electronic cash ledger.
5. Learned counsel for appellant has further submitted that appellant had made a bonafide effort to file the appeal under the beneficial provision of notification on. 53/2023 but GST portal did not allow to deposit requisite percentage of pre deposit via electronic cash ledger and therefore entire 12.5% amount was fully debited and secured via electronic credit ledger.
6. Learned departmental representative (DR) has opposed the appeal and prayed for dismissal of the same. He has further submitted that taxpayer was required to deposit 12.5% of tax in dispute as pre deposit and out of such amount 2.5% was to be deposited via electronic cash ledger and thus taxpayer had not complied with the beneficial amnesty scheme issued by CBIC. He has vehemently submitted that where taxpayer did not complied with the conditions of said scheme, he can not be allowed to file the first appeal beyond limitation prescribed for.
7. On hearing the arguments of both sides and perusal of the record showing on GSTAT portal. The question before the Tribunal to answer may be stated as under-
i) Whether the rejection of the first appeal as time barred under the amnesty scheme (notification no. 53/23 dated 02.11.2023) solely due to the debit of pre-deposit from the electronic credit ledger instead of electronic cash ledger is legally sustainable?
ii) Whether technical glitches on GST portal impeding a taxpayer form compiling strictly with ledger selection can prejudice the statutory remedy of appeal?
FINDINGS WITH REASON…
8. Admittedly subject to depositing 12.5% of disputed amount of tax (2.5% via electronic cash ledger and 10% via electronic credit ledger) time barred first appeal was allowed to be admitted for hearing under beneficial amnesty scheme for taxpayers who could not filed such appeal with in limitation, whatever the reason. In this matter taxpayer has filed first appeal u/s 107 of CGST, Act on 31.01.2024 against order dated 26.02.2022 passed by adjudicating officer, for which he made payment of pre-deposit amount via electronic credit ledger. Appellant has submitted that due to technical problem on GST portal he could not made the requisite percentage of payment through electronic cash ledger and he made entire payment via electronic credit ledger.
9. It is a well settled principle of law that a taxpayer cannot be made to suffer due to technical glitches or system error on the official portal.
10. In case of M/s Friends Mobile vs State of Bihar and others. CWJC no. 6457 of 2023, Patna High Court has held that where the taxpayer faced some difficulties or paid the pre-deposit using the electronic credit ledger instead of through electronic cash ledger, the appellate authority should not reject the appeal outright on hyper technical grounds.
11. Apart from above, in another case titled M/s Raiyan Traders vs Assistant Commissioner, CWJC no.12994 on 2024, Patna High court has held that where a pre-deposit is paid via electronic credit ledger the first appellate authority ought to have entertain the appeal on merits rather than dismissing it on procedural grounds regarding ledger segregation.
12. Learned DR has also cited a case law of the Patna High Court named Flipkart Internet Pvt. Ltd. In which Hon’ble High Court has ruled otherwise as held by it in friends mobile (SUPRA). Arguments raised by learned DR on the point under consideration is not convincing enough because of findings recorded by high court in Flipkart internet pvt. Ltd. have been challenged before Hon’ble Supreme Court who has stayed the verdict of High court and in this matter, outcome is yet to come from Apex Court.
13. Apart from above, a shortfall or misallocation in the case component of a pre-deposit is curable defect and the first appellate authority erred in summarily dismissing the appeal as time barred without providing the appellate a reasonable opportunity of being heard on merit and to make good differential cash payment or rebalance the ledger debits, once the technical issue was raised.
14. In view of above discussion of facts of the case and principle laid down in M/s Friends mobile and M/s Raiyan traders (Supra) I am is of considered opinion that the rejection of the first appeal as time barred under the amnesty scheme (notification no. 53/23 dated 02.11.2023) solely due to the debit of pre-deposit from the electronic credit ledger instead of electronic cash ledger is not legally sustainable. In so far, technical glitches on GST portal impeding a taxpayer from compiling strictly with ledger selection cannot prejudice the statutory remedy of appeal. Accordingly, questions for determination before this tribunal are answered.
15. Resultantly, present appeal is allowed, the order in appeal dated-25.09.2024, dismissing the first appeal as time barred is hereby set aside. Appellant is granted 30 days from the date of receipt this order to pay shortfall cash component of 20% of pre-deposit amount through the electronic cash ledger. Upon such payment the corresponding amount in excess from the electronic credit ledger shall be recredited in accordance with law. Subject to such compliance the first appellate authority is directed to admit the first appeal for deciding it afresh on its virtues and vices after granting a fair opportunity of hearing to taxpayer and department, as well.
16. There is no interim application in the appeal.
17. Order be communicated to first appellate authority for compliance and to all concerned as per rules. In the circumstances, cost of litigation shall be borne by respective parties.
18. Order is pronounced on 16.10.2026, in open court.
