Statutory Right to Appeal Trumps Portal Limitations; Manual Filing Permitted.

By | November 19, 2025

Statutory Right to Appeal Trumps Portal Limitations; Manual Filing Permitted.


Issue

Can a taxpayer be denied their statutory right to file an appeal under Section 107 of the CGST Act simply because the GST portal’s software logic blocks the filing when the “disputed tax” field auto-populates as ‘Nil’ (due to prior payments), even though the taxpayer still contests the liability?


Facts

  • The petitioner (taxpayer) had deposited certain amounts during the proceedings to limit the dispute but maintained their objections.

  • The Adjudicating Authority passed an order under Section 74, erroneously assuming no dispute survived.

  • When the petitioner attempted to file an appeal online, the GST portal blocked the process. This was because the system auto-populated the “Disputed Tax” field as ‘Nil’ based on the order/payments, and the software did not allow an appeal with zero disputed tax.

  • The GST Network (GSTN) argued that this was a procedural issue and the jurisdictional authority should first rectify the demand to enable the appeal.


Decision

  • The High Court ruled in favour of the assessee.

  • It held that the right of appeal is a statutory right and “procedure is the handmaid of justice.” Technical constraints of the online portal cannot eclipse or defeat a substantive legal remedy.

  • Direction to GSTN: The Court directed GSTN to modify the software within one month to allow the filing and registration of appeals even where the portal shows ‘Nil’ disputed tax. The question of maintainability is for the Appellate Authority to decide, not the software algorithm.

  • Relief to Petitioner: For the immediate case, the petitioner was permitted to file a physical (manual) appeal. The Appellate Authority was directed to register it and decide on merits without raising an objection on limitation.


Key Takeaways

  • Technology Must Yield to Law: Software limitations cannot override statutory rights. If the portal fails, the manual route must be opened.

  • Maintainability is Judicial, Not Digital: Whether an appeal is maintainable (e.g., if tax is fully paid) is a decision for the Appellate Authority to make judicially, not for the IT portal to enforce via validation checks.

  • GSTN Accountability: The judgment enforces accountability on the GSTN to ensure their system architecture aligns with legal procedures and natural justice.


GSTN to Deploy Validation Preventing Hearings Scheduled Before Reply Due Date.


Issue

Whether the design of the GST adjudication module, which technically allows an officer to schedule a personal hearing on a date before the deadline for the taxpayer to file a reply to the Show Cause Notice (SCN), violates the principles of natural justice.


Facts

  • The petitioner approached the High Court highlighting a recurring design flaw in the GST portal’s adjudication module.

  • The system permitted Proper Officers to fix a date for a personal hearing that fell before the last date allowed for filing a reply to the notice.

  • This created a logical and legal absurdity: a taxpayer cannot be effectively heard before they have submitted their written defense.


Decision

  • The High Court disposed of the petition in favour of the assessee based on the GSTN’s undertaking.

  • GSTN’s Admission: The GSTN filed written instructions admitting the issue. They stated they had examined the feasibility and would deploy a validation check across adjudication modules.

  • The Fix: The new system validation will ensure that the scheduling of a personal hearing is permitted only after the last date for filing the reply has passed.

  • Timeline: The Court directed that this necessary correction/modification be implemented on priority within one month.


Key Takeaways

  • Natural Justice Coded into Law: The sequence of adjudication (Notice $\rightarrow$ Reply $\rightarrow$ Hearing $\rightarrow$ Order) is a fundamental tenet of natural justice. Software systems must be designed to enforce this sequence, not violate it.

  • Systemic Correction: This ruling will result in a systemic update to the GST portal, preventing officers nationwide from scheduling premature hearings, thereby reducing litigation on this specific procedural ground.


HIGH COURT OF ALLAHABAD
Agarwal Aromas (P.) Ltd.
v.
Union of India*
Saumitra Dayal Singh and INDRAJEET SHUKLA, JJ.
WRIT TAX No. – 5151 of 2025
OCTOBER  28, 2025
Sumeet Mishra and Suyash Agarwal for the Petitioner. Dhananjay Awasthi and Gopal Verma for the Respondent.
ORDER
1. Heard Sri Sumeet Mishra learned counsel for the petitioner, Sri Gopal Verma learned counsel for GSTN and Sri Arvind Kumar Mishra learned counsel for the revenue.
2. Present petition has been filed for the following relief:
“Issue a writ, order, or direction in the nature of mandamus directing the competent Respondent to remove the lacuna in filing appeal online on the portal and accept the Petitioner’s statutory appeal under section 107 of the UPGST Act against the order dated 30.05.2025 passed under Section 74, UPGST Act by the respondent no. 3. (Annexure- 1).”
3. Primarily, the grievance of the petitioner is that its right to file statutory appeal against the order dated 30.05.2025 passed under Section 74 of the UPGST Act, 2017, cannot be eclipsed or denied for reason of the disputed amount of tax deposited by the petitioner, prior to the impugned order being passed. Earlier, the petitioner was issued Show Cause Notice proposing to confirm demand of tax Rs. 1,99,260/- together with interest and penalty Rs. 1,88,301/- and Rs. 49,815/-, respectively.
4. Only to limit the dispute arising from the issuance of the Show Cause Notice dated 25.02.2025, the petitioner had been advised and it made the necessary deposit. However, it had objected to the proposed demand of tax, interest and penalty. Merely, because the Adjudicating Authority may have passed an order assuming that there was no surviving dispute, it may not deprive the petitioner its right to appeal against the order dated 30.05.2025.
5. At present, the disability to file appeal against the order dated 30.05.2025 has arisen because the Online Portal established, run and managed by GSTN (respondent No. 1) is not enabling the petitioner to file such appeal. All attempts to file appeal through online mode failed because against the column ‘Disputed Demand of Tax’, the Online Portal is retrieving the information from the impugned order and reflecting the same as ‘Nil’. Therefore, the attempts being made by the petitioner to file the appeal have failed.
6. On 14.10.2025, on brief hearing, we passed the following order:
“1. Difficulty is being faced by the petitioner in filing statutory appeal against the order dated 30.05.2025. Grievance of the petitioner is, for reason of disputed tax having paid and response to the show cause notice, the feature of the common portal designed for filing appeals has been automatically disabled. At present, on efforts being made by the petitioner to file an appeal, the portal is responding by displaying the words -“disputed amount cannot be zero”.
2. Shri Gopal Verma, learned counsel for GSTN has obtained telephonic instructions. He prays for short accommodation.
3. Another common difficulty that has come to our notice through numerous petitions wherever date for filing of reply and date of personal hearing are being communicated to the assessee in response to the adjudication notices and other notices, the proper officers/adjudicating authorities operating the portal are inadvertently filling up the date of hearing prior to the date of filing reply. Fixing of such dates vide statutory notices creates incurable defect to the proceedings.
4. On a prima facie basis, we may observe, in computer applications, it is easily possible to build logic as may prevent fixing date of hearing prior to the date of filing reply. It may be noted, in no case (without exception) any possibility may ever exist where the date for personal hearing may be fixed before the date for filing of reply.
5. Accordingly, we further observe, the said issue is easily resolvable by providing an appropriate modification as may ensure that such inadvertent error is never caused by any officer operating the portal inasmuch as once he fills up the date for filing the reply, the next tab requiring the date for personal hearing may never be allowed to be fixed up to the date of filing reply. Since the law necessarily requires that the date of filing reply and date of personal hearing may not be the same and there may be minimal gap between the two dates, such a measure is necessary.
6. Put up as fresh on 28.10.2025 to enable Shri Gopal Verma to obtain written instructions with respect to both issues noted above. If resolution of either of the two disputes is not possible to be made, written instructions wouldfully disclose the technical and other reasons.”
7. Today, Sri Gopal Verma learned counsel for respondent No. 1 has supplied a copy of the written instructions received by him from the Vice President-Legal & FAA Goods and Services Tax Network. The same has been marked as ‘X’ and retained on record. Insofar as the second issue flagged in our last order – with respect to date of hearing being fixed before the date of filing of reply, the instructions are specific. They read as below:
“Further, with respect to the direction passed by the Hon’ble High Court vide order dated 14th October 2025 (para No. 4&5) thereby directing GSTN to allow the officer to schedule the date of personal hearing only after the date of filing of reply. In this regard, it is stated that GSTN has technically examined the feasibility of introducing such modification/validation across the Adjudication and other notices Modules, and the same will be deployed on priority to enable the proper officers/adjudicating authorities avoiding filling up the date of hearing prior to the date of filing reply.”
8. We appreciate the prompt response of respondent No. 1 in recognising the issue flagged by us and in assuring to offer remedial measures expeditiously. In view of that resolution offered, no further direction is required to be issued on that count, at present. Sri Gopal Verma assures the Court that necessary correction would be made soon.
9. On the first aspect, the written instructions read as below:
“Given the above, it is respectfully submitted that the issue raised in the instant writ petition pertaining to the filing of an ‘Appeal’ does not relate to any technical or portal-related constraint, but rather to a procedural aspect. Accordingly, the concerned jurisdictional tax authority/tax officer to be contacted to create/rectify the demand in the system, to enable the taxpayer/petitioner to file the ‘Appeal’ on the GST portal in accordance with law. ”
10. Submissions have also been advanced by Sri Gopal Verma to similar effect. We have considered the same.
11. At present, we are unable to accept the correctness of the stand taken by the GSTN. Though technically the GSTN authorities may feel inclined to observe that there is no error in the Online Portal – in not permitting the petitioner to file such appeal and the error if any, may be on part of the jurisdictional authority, that view of the GSTN authorities may not find our acceptance for the reason-appeal is a creature of statute, as held in Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh (1953) 1 SCC 299. Once, the statute has given a person aggrieved (here the petitioner), a right to appeal against an order, that right may not be denied or obstructed on technicalities or rules of procedure.
12. Procedure is handmaid of justice as held in State of Punjab v. Shamlal Murari (1976) 1 SCC 719. Earlier, when appeals were filed through physical mode, the dealing officials did not have liberty or discretion to not register an appeal presented for filing before an Appeal Authority. Whether an appeal may or may not lie and if such appeal may be entertained may remain matters falling in the realm of quasi-judicial power to be exercised by the Appeal Authority. The procedure of filing an appeal may not be employed to overreach the exercise of quasi-judicial power of the appeal authority. To that extent, the dealing officials remained duty bound to accept, register and send the record of the appeal to the quasi-judicial authority/Appeal Authority, competent to deal with the same.
13. With the introduction of technology and in view of Online mode being the prescribed mode for filing all appeals under the GST regime, the only change we recognise and accommodate is the replacement of the officials i.e. human agents dealing with filing/reporting of appeals with machine run, software driven technology. No other change has been made to the substantive law as may allow a larger discretion to be exercised under the procedural law as may eclipse or obstruct the statutory right of appeal, that vests in the petitioner – to file an appeal against the Adjudication Order dated 30.05.2025.
14. Therefore, on the second issue, the GSTN authorities may make appropriate change in the program/software to enable filing of appeals even if according to the digital records, the disputed tax liability may reflext as ‘Nil’. It may remain permissible to the GSTN authorities to accept and register such appeals with a note that there is no disputed tax liability reflected from the digital record and therefore the issue of maintainability of the appeal may be examined by the quasi-judicial authority i.e. the Appeal Authority.
15. This direction and the refinement proposed by GSTN (see para 7), may be carried out by the GSTN within a period of one month from today.
16. Since filing of the appeal cannot be held hostage to the correction that is necessary to be made by the GSTN, in its technical processes, in the interest of justice, we provide – in the present case the petitioner may file his appeal through physical mode before the appropriate Appeal Authority, within a period of two weeks from today.
17. Subject to such appeal being filed, the same may be registered, dealt with and decided on its own merits without raising any objection as to limitation or for reason of such appeal being filed through physical mode. The appeal itself may be heard and decided expeditiously.
18. With the above directions, present writ petition is disposed of.
19. Let a copy of this order be communicated to respondent No. 1 by Sri Gopal Verma within three days.
Category: GST

About CA Satbir Singh

Chartered Accountant having 12+ years of Experience in Taxation , Finance and GST related matters and can be reached at Email : Taxheal@gmail.com