Recognition of Prior Deposits as Pre-Deposit for GST Appeals under November 2025 Manual

Facts

The Context: The petitioner underwent a de novo adjudication process for the period 2017-18 to 2019-20. This followed a previous High Court order that remitted the matter for fresh consideration on the condition that the petitioner deposit 10% of the disputed amount.
The Compliance: The petitioner complied with this condition by paying the amount through Form DRC-03A/investigation payments during the earlier proceedings.
The Conflict: After the de novo assessment orders were issued, the petitioner filed manual appeals under Section 107. However, due to systemic changes and updates to the GST portal, the previously deposited amount was not automatically recognized as the statutory pre-deposit required for filing the appeal.
The Legal Shift: A new Appeal Manual effective from November 2025 was introduced. This manual mandates that if a taxpayer seeks to adjust or declare a lower percentage of pre-deposit (or treat a prior payment as such), they must obtain specific approval from the Appellate Authority.
The Representation: The petitioner filed a representation seeking such approval to treat the 10% already paid as the required pre-deposit, which was pending at the time of the writ petition.

Decision

Final Verdict: In favour of the Assessee (Matter Remanded).
Ratio Decidendi:
- Primacy of the Manual: The Court recognized that the administrative framework for GST appeals has evolved with the November 2025 Manual, which now provides a structured mechanism for handling pre-deposits that are not auto-populated by the portal.
- Mandate to Consider: The Court held that the Appellate Authority cannot leave such representations unaddressed. Under the new manual, the Authority has the power (and duty) to verify and approve the adjustment of prior deposits against appeal requirements.
- Timely Redressal: The Court directed the Appellate Authority to consider the petitioner’s representation in the light of the updated manual and pass orders, preferably within thirty days, to ensure the appeals could be formally admitted and heard on merits.

Key Takeaways

The DRC-03A Bridge: For payments made during investigations or prior to a formal demand ID (via DRC-03), taxpayers must now use Form DRC-03A to link these payments to the relevant Demand ID in the Electronic Liability Register. This is essential for the portal to “see” the payment for pre-deposit purposes.
Approval for Lower/Prior Deposits: As per the November 2025 Appeal Manual, if the portal does not auto-recognize a deposit, or if you are claiming a lower percentage due to prior court orders, you must file a formal representation to the Appellate Authority. Manual appeals now require this explicit approval step.
Audit Trail for Manual Appeals: Professionals should maintain a clear paper trail of all “voluntary” or “investigation-stage” payments. If a matter is remitted by a court, ensure the 10% paid is clearly earmarked to avoid duplication of deposits when filing the subsequent appeal.
Time-Bound Compliance: Since the manual appeal process is now more regimented, acting within the 30-day window for representation disposal (as directed in this case) is critical to prevent the recovery of the remaining 90% of the tax demand.

HIGH COURT OF MADRAS

Dharun

Deputy Commissioner (ST) (GST) (Appeal)^*

C. Saravanan, J.

W. P. Nos. 10126, 10128 & 10130 OF 2026

MARCH 16, 2026

S. Ramamurthy and R. Premchandar for the Petitioner. Ms. Anitha Poonkodi Dinakaran, Govt. Adv. for the Respondent.

ORDER

1. Ms.Anitha Poonkodi Dinakaran, learned Government Advocate, takes notice for the Respondents.

2. By this common order, both these Writ Petitions are being disposed of at the time of admission with the consent of the learned counsel for the Petitioner and learned Government Advocate for the Respondents.

3. This is the second round of litigation.

4. The Petitioner has filed statutory appeals before the 1^st respondent/Appellate Authority manually on 16.02.2026 against the assessment orders dated 19.11.2025 passed in Form GST ORC-07 for the tax periods 201718, 2018-19 and 2019-20. These assessment orders were passed pursuant to the order dated 16.08.2024 of this Court in W.P.No.15366 of 2021 and SS Traders v. Joint Commissioner (ST) (Intelligence) GST 106/92 GSTL 196 (Madras)/W.P.No.15363 of 2021.

5. By the order dated 16.08.2024, the case was remitted back to the original authority for de novo adjudication, subject to the Petitioner depositing 10% of the disputed tax. There is no dispute that the petitioner has complied with the said order of the Writ Court, pursuant to which the aforesaid assessment orders dated 19.11.2025 have been passed.

6. The amount of disputed tax pre-deposited by the Petitioner in compliance with the order dated 16.08.2024 of the Writ Court has been appropriately adjusted and the balance amount has been shown as due from the Petitioner for the respective tax periods.

7. The learned counsel for the Petitioner submits that there has been a slight change in the architecture of the GST portal, due to which the Petitioner is unable to treat the amount pre-deposited pursuant to the aforesaid order dated 16.08.2024 of this Court as pre-deposit for the purpose of filing an appeal under Section 107 of the respective GST Enactments.

8. Specifically, the learned counsel for the Petitioner has drawn the attention of this Court to an extract from the appeal manual in the GST portal, according to which the Petitioner is required to obtain approval from the competent authority. Hence, the Petitioner has submitted a representation dated 16.02.2026 in the light of the appeal filed on the same date against the de novo assessment orders dated 19.11.2025 for the respective tax periods.

9. The learned counsel for the Petitioner would further submit that the issue is no longer res integra, as it is covered by the decision of the Hon’ble Supreme Court in VVF (India) Ltd. v. State of Maharashtra (2022) 13 SCC 644.

10. The learned counsel for the Respondents, on the other hand, would submit that the Petitioner’s representation will be considered on merits and disposed of accordingly.

11. I have considered the submissions made by the learned counsel for the Petitioner and the learned counsel for the Respondents.

12. Recording the aforesaid submission of the learned counsel for the Respondent, 1^st Respondent/Appellate Authority is directed to consider the aforesaid representation dated 16.02.2026 of the Petitioner for the appeals dated 16.02.2026 in the light of the appeal manual in the GST portal, as in force with effect from November 2025, which mandates obtaining approval from the Appellate Authority for deposit of a lower percentage of the amount.

13. While passing such orders, the Respondents shall take into account the decision of the Hon’ble Supreme Court referred to supra. The said exercise shall be completed by the 1^st respondent/Appellate Authority as expeditiously as possible, preferably within a period of thirty days from today.

14. These Writ Petitions are disposed of with the above observations. No costs.