Telangana HC Allows Delayed GST Appeal Filing Upon Statutory Pre-Deposit

ABMS INFR Vs Goods and Services Tax Network (Telangana High Court)

Telangana High Court Allows Delayed GST Appeal Filing Upon Statutory Pre-Deposit – Relief to Taxpayer Pursuing Alternate Remedies  

GST regime is mandatory for filing an appeal and cannot be waived merely because the taxpayer disputes the penalty demand or has already paid the tax dues during adjudication proceedings. However, the Court granted relief by permitting the petitioner to file a delayed appeal considering the bona fide correspondence pursued with GSTN authorities.

Introduction

In the case of M/s. ABMS INFR vs GSTN & Others, the Telangana High Court dealt with an important issue concerning GST appellate procedure — whether a taxpayer can seek exemption from mandatory pre-deposit when the tax amount has already been paid and only penalty remains disputed.

The Court clarified that GST law does not provide any exemption from statutory pre-deposit requirements for filing appeals. At the same time, recognizing the bona fide conduct of the petitioner, the Court permitted delayed filing of appeal with a direction to the appellate authority to consider delay sympathetically.

Case Background

The petitioner, M/s. ABMS INFR, had received an Order-in-Original dated 03.09.2025 imposing:

• Tax liability of ₹86,106/-
• Equivalent penalty under Section 74(9) of the CGST Act, 2017
• Interest liability of ₹51,352/-

The dispute related to the tax period of October 2022.

According to the petitioner:

• The outstanding tax dues had already been paid during adjudication proceedings.
• Since tax was already discharged, penalty was not sustainable.
• The petitioner had been continuously corresponding with GSTN authorities seeking permission to file appeal without making statutory pre-deposit against the penalty component.
• During this process, the limitation period for filing appeal expired.

Consequently, the petitioner approached the Telangana High Court seeking relief.

Key Legal Issue

The primary issue before the Court was:

Whether a taxpayer can be exempted from statutory pre-deposit under GST law while filing an appeal merely because tax dues were already paid and only penalty remained disputed?

A connected issue was:

Whether delay in filing appeal can be condoned when the taxpayer was bona fide pursuing remedies before authorities?

Arguments Presented

Petitioner’s Arguments

The petitioner contended that:

1. The tax dues had already been paid during adjudication proceedings.

2. No separate penalty liability should survive once tax was discharged.

3. The petitioner had been bona fide pursuing correspondence with GSTN authorities regarding exemption from pre-deposit.

4. Delay in filing appeal occurred because of these ongoing representations.

5. Therefore, exemption from pre-deposit should be granted or appropriate relief should be provided.

Respondents’ Arguments

GSTN’s Stand

GSTN submitted that:

• It had no statutory power to exempt any taxpayer from mandatory pre-deposit requirements.

State Tax Department’s Stand

The State Tax Department argued that:

1. Pre-deposit is a statutory prerequisite for maintaining an appeal under GST law.

2. Whether penalty was correctly imposed can only be examined by the appellate authority.

3. Such dispute cannot be used as a ground for exemption from pre-deposit.

4. However, the petitioner may be allowed to file appeal with delay condonation application.

Court Observations

The Telangana High Court agreed with the respondents and held that:

• GST law does not provide any exemption from mandatory pre-deposit requirements.
• The correctness of tax or penalty demand can only be adjudicated in appeal proceedings.
• The appellate remedy cannot be bypassed on the ground that penalty itself is disputed.

However, the Court also took note of the following factors:

• The petitioner had been actively corresponding with authorities.
• The delay was not entirely deliberate or negligent.
• The petitioner should be given an opportunity to pursue statutory appellate remedy.

The Court therefore exercised its writ jurisdiction to protect the petitioner’s right to appeal.

Final Judgment

The Telangana High Court disposed of the writ petition with the following directions:

1. The petitioner was permitted to file appeal within two weeks.

2. The appeal must be accompanied by:

• • Statutory pre-deposit
  • Delay condonation application

3. The petitioner was allowed to raise all legal and factual grounds before the appellate authority.

4. The appellate authority was directed to:

• • Consider delay sympathetically
  • Take into account the petitioner’s correspondence with authorities
  • Decide the appeal on merits if satisfied with the explanation for delay

5. The Court further requested that the appeal be decided preferably within twelve weeks.

Author’s Analysis

1. Mandatory Pre-Deposit Cannot Be Avoided

This judgment reinforces a settled GST principle:

Filing of appeal under GST is conditional upon statutory pre-deposit.

Even if:

• tax has already been paid,
• penalty alone is disputed, or
• taxpayer believes demand is illegal,

the statutory requirement cannot ordinarily be waived.

2. High Courts Continue to Protect Bona Fide Taxpayers

Although the Court refused waiver of pre-deposit, it protected the taxpayer by:

• allowing delayed appeal,
• directing sympathetic consideration of delay, and
• safeguarding access to appellate remedy.

This shows that courts distinguish between:

• deliberate negligence, and
• bona fide procedural confusion.

3. GSTN Cannot Grant Legal Exemptions

An important practical takeaway is that GSTN functions as a technological platform and not an adjudicatory authority.

Therefore:

• GSTN cannot waive statutory conditions,
• cannot modify legal requirements, and
• cannot override provisions of the CGST Act.

4. Taxpayers Should Avoid Delaying Statutory Appeals

The case also serves as a caution:

Continuous representations before authorities do not automatically stop limitation periods.

Taxpayers should:

• file protective appeals within limitation period,
• comply with statutory pre-deposit requirements, and
• simultaneously pursue representations if required.

Conclusion

The Telangana High Court in M/s. ABMS INFR vs GSTN & Others reaffirmed that statutory pre-deposit is compulsory for GST appeals and cannot be waived merely because the taxpayer disputes the penalty component. Nevertheless, the Court adopted a balanced approach by allowing delayed filing of appeal considering the petitioner’s bona fide efforts and correspondence with authorities.

The ruling highlights the importance of timely appellate compliance under GST while also demonstrating the judiciary’s willingness to protect genuine taxpayers from procedural hardships.

FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT

Heard Mr.K.P.Amarnath Reddy, learned counsel for the petitioner and Mr.Dominic Fernandes, learned Senior Standing Counsel for CBIC appearing on behalf of respondent No.1; Mr.T.Chaitanya Kiran, learned Assistant Government Pleader representing Mr.Swaroop Oorilla, learned Special Government Pleader for State Tax appearing on behalf of respondent Nos.2 and 3 and Mr.B.Mukharjee, learned counsel representing Mr.N.Bhujanga Rao, learned Deputy Solicitor General of India appearing on behalf of respondent No.4. Perused the record.

2. The petitioner claims to have paid the outstanding dues after issuance of the show cause notice during the pendency of the adjudication proceedings, but the order-in-original dated 03.09.2025 has imposed the tax liability of Rs.86,106/-, similar amount of penalty under Section 74(9) of the Central Goods and Services Tax Act, 2017, and interest under Section 50 of the said Act amounting to Rs.51,352/- relatable to the period October, 2022. The petitioner had been making correspondence with the GSTN to permit it to file an appeal without pre-deposit, as the outstanding tax dues had already been paid and no case of penalty could be made out. However, in that process, time for filing the appeal expired. It is contended by the learned counsel for the petitioner that the petitioner has good grounds to explain the delay. But, the petitioner may not be compelled to make the pre-deposit of 10% against the penalty amount in the aforesaid circumstances.

3. Learned Senior Standing Counsel appearing for GSTN submits that there is no power with the GSTN to exempt the pre-deposit for filing the appeal.

4. Learned Assistant Government Pleader appearing for the State Tax also submits that the pre-deposit is a prerequisite for filing the appeal. Whether the deposit of tax during the adjudication proceedings could relieve the petitioner of the liability of penalty is a matter to be decided by the appellate authority only upon the appeal being filed with pre-deposit. The petitioner, therefore, cannot claim any exemption from making the pre-deposit. Learned Assistant Government Pleader also submits that the petitioner may be allowed liberty to approach the appellate authority with an explanation for the delay within a stipulated period and take all such grounds of law and facts in its appeal.

5. In the facts and circumstances noted above, since there is no exemption for any taxpayer from making pre-deposit while filing the appeal under the GST regime, whether the liability of penalty or tax was rightly imposed or not would be the subject matter of appeal on merits, the same cannot be a ground to seek exemption from making the pre-deposit. However, since the petitioner had been in correspondence with the respondent authorities on this issue and has missed the cut off date for filing the appeal, we grant liberty to the petitioner to file the appeal within a period of two weeks with statutory deposit and a delay condonation application. The petitioner may take all such grounds of law and facts in the memo of appeal as are available to it. Needless to say, the appellate authority would consider the question of delay sympathetically taking into account the aforesaid facts and circumstances and if he is satisfied on the point of delay, proceed to decide the appeal on merits in accordance with law within a reasonable time, preferably, within twelve weeks from the date of receipt of a copy of this order.

6. The writ petition is accordingly disposed of.

Consequently, miscellaneous petitions pending, if any, shall stand closed. There shall be no order as to costs.