Rejection of Appeal for Pre-Deposit Invalid After Authority Registered Appeal and Issued Hearing Notice

Issue

Whether an Appellate Authority can reject a GST appeal on the ground of non-compliance with the mandatory pre-deposit requirement after it has already accepted the manual appeal, assigned an appeal number, and issued a notice for a personal hearing.

Facts

Manual Process: The Superintendent (CGST) issued a manual Order-in-Original against the petitioner. Consequently, the petitioner filed a manual appeal before the First Appellate Authority.
Acceptance by Authority: The Appellate Authority received the memorandum of appeal, registered it, and assigned an Appeal Number.
Procedural Progress: The Authority proceeded to issue a notice for a personal hearing, indicating that the appeal had passed the preliminary admittance stage.
The Rejection: Subsequently, the Appellate Authority rejected the appeal, citing failure to comply with the mandatory pre-deposit requirement under Section 107(6).
Petitioner’s Plea: The petitioner challenged this rejection in the High Court, arguing that the registration of the appeal and issuance of a hearing notice warranted a decision on the merits. Furthermore, the petitioner submitted proof that the requisite pre-deposit had indeed been paid.

Decision

The High Court set aside the Appellate Authority’s rejection order.
Implied Waiver/Acceptance: The Court held that although the statute bars appeals without pre-deposit, the Authority’s actions—accepting the appeal, numbering it, and scheduling a hearing—indicated an “omission or waiver” of the pre-deposit verification stage with an intent to proceed on merits.
Compliance Proven: Since the petitioner produced evidence that the pre-deposit had been paid, the rejection was legally unsustainable.
Restoration: The appeal was restored to the file of the Appellate Authority for adjudication on the merits.

Key Takeaways

Procedural Estoppel: Once an Appellate Authority registers an appeal and initiates hearing proceedings, it cannot arbitrarily revert to the preliminary stage to reject the appeal on technical grounds like pre-deposit, especially if compliance is proven.
Manual Filing Nuances: In cases of manual filings (where the portal’s auto-checks are absent), the Authority’s manual acceptance of the appeal carries significant weight regarding the satisfaction of preliminary conditions.
Proof of Payment Cures Defect: The production of the challan showing the pre-deposit payment effectively cures the alleged defect, mandating a hearing on the merits of the case.

HIGH COURT OF ORISSA

GAEA Engineers and Contractors (P.) Ltd.

Chief Commissioner of CGST & Central Excise^*

HARISH TANDON, CJ.
and MURAHARI SRI RAMAN, J.

W.P. (C) No. 25187 of 2025

NOVEMBER 6, 2025

Ms. Itishree Tripathy, Adv. for the Petitioner. Mukesh Agarwal, Junior Standing Counsel for the Respondent.

ORDER

1. In the present writ petition, challenge is laid to the order dated 01.11.2024 passed in Appeal No.518/GST/BBSR/ADC/2024-25 rejecting the appeal filed under Section 107 of the Central Goods and Service Tax Act, 2017/ the Odisha Goods and Services Tax Act, 2017 (collectively, “GST Act”) on the ground that there has been non-compliance of statutory requirement of sub-section (6) thereof.

2. Ms. Itishree Tripathy, learned counsel appearing for the petitioner submitted that challenging the Order-in-Original dated 14.11.2023 passed by the Superintendent, GST and Central Excise, Bhubaneswar-VI Range, Bhubaneswar, an appeal was preferred under Section 107 of the GST Act. The Department having received the memorandum of appeal, registered the case and allotted No.518/GST/ BBSR/ADC/2024-25. Had there been restriction or defect in such filing, the same could have been brought to the notie of the petitioner within reasonable period and/or returned the memorandum of appeal without registering it.

2.1. It is contended that since the Proper Officer/Adjudicating Authority had passed the Order-in-Original manually, the petitioner filed the appeal manually. Nevertheless, it is ex facie from the Appellate Order that the First Appellate Authority has issued “notice of personal hearing”, but he proceeded to reject the appeal without considering the merit of the appeal.

2.2. Ms. Tripathy, learned counsel for the petitioner sought to urge that this mercy petition has been filed for taking cognizance of the fact that the petitioner has already deposited the requisite amount of Rs.1,58,179/- in compliance of requirement under sub-section (6) of Section 107 of the CGST Act on 04.09.2025 and, therefore, she fervently prayed for setting aside the Order-in-Appeal and restore the appeal for rendering decision on merit.

3. Sri Mukesh Agarwal, learned Junior Standing Counsel appearing for the Department submitted that since the petitioner has not complied with the statutory mandate required under sub-section (6) of Section 107 of the GST Act, the Appellate Authority has no authority to proceed with the hearing of the appeal, notwithstanding notice for personal hearing was issued.

4. Heard Ms. Itishree Tripathy, learned counsel appearing for the petitioner and Sri Mukesh Agarwal, learned Junior Standing Counsel appearing for the Department.

5. It is manifest on perusal of Order-in-Appeal that under the Heading “Personal Hearing”, the following is reflected:

“4.0. The case was posted for personal hearing on 24.09.2024 vide letter dated 12.09.2024. However, the Notice of personal hearing was returned by the postal department with the remarks “No such person”.

6. Despite the statute itself restrains filing of appeal without satisfying the condition for pre-deposit as envisaged under Section 107(6), the Appellate Authority has received the appeal and assigned it a number, i.e., “Appeal No.518/GST/BBSR/ADC/2024-25”. This indicates that the Appellate Authority omitted and/or waived the condition stipulated in Section 107(6), but he intended to proceed with the hearing of appeal on merit. Since the learned counsel for the petitioner during the course of hearing, drew attention to Annexure-4 to demonstrate that the petitioner has deposited the amount required under sub-section (6) of Section 107 of the GST Act, this Court feels it appropriate to set aside the order of rejection of appeal (Annexure-1).

6.1. In order to avail opportunity to have the appeal to be heard on merit, the Appellant is at liberty to appear before the Appellate Authority on or before 28.11.2025. On its appearance the Appellate Authority may fix date of hearing by taking into consideration the amount deposited vide payment receipt dated 04.09.2025 (Annexure-4), and restoring the appeal to file.

6.2. In the event of failure on the part of the petitioner to appear before the Appellate Authority not later than the stipulated date, this order would have no impact on the impugned Appellate Order, which would automatically revive.

6.3. It is expected that the Appellate Authority shall make endeavor to hear and dispose of the appeal as expeditiously as possible. It is clarified that this Court has expressed no opinion on the merit of the case.

6.4. It is further made clear that on considering the peculiar facts and circumstances of the case, this order has been passed.

7. With the aforesaid observation, this writ petition is disposed of. Pending Interlocutory Applications, if any, shall also stand disposed of.