GST Taxpayer Gets Court Help to File Appeal After Portal Access Blocked

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Case Name

Sanyog Construction Private Limited vs. The State of Bihar & Others

Court Name: High Court of Judicature at Patna

Case No.: Civil Writ Jurisdiction Case No. 7195 of 2020

Decided on: 27th August 2020

Coram: Hon’ble the Chief Justice Sanjay Karol & Hon’ble Mr. Justice S. Kumar

Key Takeaways

1. A taxpayer cannot be denied access to the GST web portal to file a statutory appeal if they are willing to comply with the pre-deposit requirement under Section 107 of the CGST/BGST Act, 2017

2. The pre-deposit of 10% of the disputed tax amount is a mandatory condition for filing an appeal under GST law.

3. During the COVID-19 pandemic, courts directed appellate authorities to hear appeals through virtual mode4The court emphasized expeditious disposal of appeals — directing a decision within 3 months of filing5The State cannot take coercive recovery steps while a taxpayer is in the process of filing a legitimate appeal

Issue

The central legal question here is:

Can a taxpayer be denied access to the GST web portal to upload a statutory appeal under Section 107 of the GST Act, 2017, especially when the tax authority has already adjusted/recovered the 10% pre-deposit amount against the demand, rather than treating it as a pre-deposit for the appeal?

In simpler terms — the company wanted to file an appeal, but the portal wasn’t allowing them to do so because the 10% pre-deposit amount (₹71,842/-) was being adjusted against the demand instead of being treated as the pre-deposit required for filing the appeal.

Facts

1. The Company: Sanyog Construction Private Limited is a company registered under the Companies Act, 1956, with its office at Naya Tola, Patna. The case was filed through its Director, Sri Ujjwal Pratap Singh.

2. The Tax Assessment: The company received an Assessment Order dated 30.05.2019/30.08.2019, passed under Section 62 of the GST Act, 2017 (which deals with assessment of non-filers of returns), for the month of April 2019.

3. The Demand: Following the assessment, a demand notice in Form DRC-07 dated 02.09.2019 was issued, demanding a total of ₹7,18,413.34 from the company.

4. The Problem: When the company tried to file an appeal against this demand on the GST web portal under Section 107 of the GST Act, 2017, it faced a technical/procedural hurdle — the 10% pre-deposit amount of ₹71,842/- (which is mandatory for filing an appeal) was being adjusted against the demand itself, rather than being treated as the pre-deposit for the appeal. This effectively blocked the company from uploading the appeal.

5. Application to Commissioner: The company had also filed an application dated 05.03.2020 before the Commissioner of State Taxes seeking resolution, but that application was apparently not decided.

6. Approaching the High Court: Left with no option, the company filed Civil Writ Jurisdiction Case No. 7195 of 2020 before the Patna High Court in 2020.

Arguments

Petitioner’s Arguments (Sanyog Construction Pvt. Ltd.)

• The company, through its counsel Mr. Chiranjiva Ranjan, argued that it was being prevented from exercising its statutory right to appeal under Section 107 of the CGST Act, 2017 / Bihar GST Act, 2017.

• The company was willing and ready to deposit:
• The full amount towards tax, interest, fine, fee and penalty as admitted by it, AND
• An additional 10% of the remaining disputed tax amount as required for filing the appeal
• The company requested that no coercive recovery steps be taken against it while the appeal process was pending.

• The company also sought a direction to the Commissioner of State Taxes to decide its application dated 05.03.2020 on merits.

• The company’s counsel gave an undertaking that the petitioner would fully cooperate and not seek unnecessary adjournments in the appeal proceedings.

Respondent’s Arguments (State of Bihar / Tax Authorities)

• The State, through Mr. Vikash Kumar (Standing Counsel-XI), took a cooperative stance before the court.

• The State agreed that if the petitioner deposits the admitted tax amounts AND 10% of the remaining disputed tax, the concerned authority will allow access to the petitioner for uploading the statutory appeal on the GST Web Portal as required under Section 107 of the CGST Act, 2017 / Bihar GST Act, 2017.

Key Legal Precedents

This judgment is a short, consent-based disposal order and does not cite any prior case law or judicial precedents. However, it does reference the following statutory provisions, which are crucial to understand:

1. Section 107 of the Central Goods and Services Tax Act, 2017 / Bihar Goods and Services Tax Act, 2017

• This is the appeals provision under GST law.
• It allows any person aggrieved by a decision or order passed by an adjudicating authority to appeal to the Appellate Authority.
• Crucially, Section 107(6) requires the appellant to mandatorily deposit the amount of tax, interest, fine, fee and penalty arising from the impugned order that is admitted, AND 10% of the remaining amount of tax in dispute as a pre-condition for filing the appeal.
• This 10% pre-deposit is what was at the heart of the dispute in this case.

2. Section 62 of the GST Act, 2017

• This section deals with “Assessment of non-filers of returns”.
• When a registered taxpayer fails to file returns, the tax officer can assess the tax liability of such person to the best of his judgment.
• The original assessment order in this case was passed under this section.

Note: No judicial precedents (case laws) were cited in this judgment. The court resolved the matter based on the parties’ statements and the applicable statutory provisions.

Judgment

Who Won?

The Petitioner (Sanyog Construction Pvt. Ltd.) substantially succeeded in getting the relief it sought, though the matter was resolved through a consent arrangement rather than a contested ruling.

What Did the Court Decide?

The court disposed of the petition with the following key directions:

1. Deposit Obligation: The petitioner must deposit:

• The amount towards tax, interest, fine, fee and penalty as admitted, AND
• 10% of the remaining disputed tax amount
• All of this to be done within four weeks from the date of the order (i.e., by 27.09.2020)

2. Portal Access: Once the petitioner complies with the deposit condition, the concerned authority will allow access to the petitioner to upload the statutory appeal on the GST Web Portal under Section 107 of the CGST Act, 2017 / Bihar GST Act, 2017

3. Virtual Hearing: Given the COVID-19 pandemic, the appellate authority was directed to hear the appeal through virtual mode

4. Time-Bound Disposal: The appellate authority was directed to decide the appeal expeditiously, preferably within three months from the date of its filing

5. No Coercive Steps: Implicitly, by allowing the appeal process to proceed, the court ensured no coercive recovery would happen during the appeal

Court’s Reasoning:

The court took a pragmatic and balanced approach — the petitioner showed genuine willingness to comply with the law (deposit the pre-deposit amount), and the State showed reasonableness by agreeing to allow portal access upon compliance. The court simply formalized this arrangement and added a time-bound direction for disposal of the appeal.

FAQs

Q1: What is the “10% pre-deposit” requirement for GST appeals?

Under Section 107(6) of the CGST Act, 2017, before you can file an appeal against a GST demand, you must first deposit the full admitted tax amount PLUS 10% of the remaining disputed tax. This is a mandatory pre-condition — without it, your appeal cannot be filed. In this case, the 10% worked out to ₹71,842/-.

Q2: Why couldn’t the company just file the appeal directly?

The GST web portal apparently wasn’t allowing the company to upload the appeal because the 10% pre-deposit amount was being adjusted against the demand rather than being treated as the pre-deposit for the appeal. This is a technical/procedural issue that required court intervention.

Q3: What is Section 62 of the GST Act under which the original assessment was made?

Section 62 deals with “best judgment assessment” of taxpayers who fail to file their GST returns. The tax officer estimates the tax liability based on available information. This is why the company received a demand — it appears returns were not filed for April 2019.

Q4: What happens if the company doesn’t deposit the amount within four weeks?

The court’s directions were conditional on the petitioner complying within four weeks. If the company fails to deposit, the tax authorities would be free to proceed with recovery, and the company would lose the protection offered by this order.

Q5: Why was the appeal to be heard through virtual mode?

This judgment was passed on 27th August 2020, during the height of the COVID-19 pandemic. Courts and tribunals across India were operating in virtual/online mode during this period, and the court specifically directed virtual hearing keeping this in mind.

Q6: Is this judgment significant as a legal precedent?

This is a consent disposal order — meaning both parties agreed to the terms. It doesn’t lay down any new legal principle. However, it does reinforce the taxpayer’s right to access the GST portal for filing appeals and the importance of the pre-deposit mechanism under Section 107 of the CGST Act, 2017.

Q7: What does “AFR/NAFR” mean at the end of the judgment?

“AFR” stands for “Approved For Reporting” and “NAFR” stands for “Not Approved For Reporting.” This notation indicates whether the judgment is approved to be published in law reporters/journals. In this case, both are mentioned, suggesting the court left it open.

Petitioner has prayed for the following reliefs:

“I. To the respondent no. 4 to permit the Petitioner

to file/upload statutory appeal on the GST web

portal under section 107 of the GST Act, 2017

(as contained in Annexure-4) without adjusting

the amount of pre- requisite 10% (Rs. 71,842/-)

amount of the assessed/disputed amount of tax

against the demand (as contained in Annexure-

4/1) for filing of appeal against Assessment

order dated 30.05.2019/30.8.2019 passed under

section 62 of GST,2017 (as contained in Annexure-1) for the month of April 2019 whereby demand of Rs. 7,18,413.34 has been

asked to pay by issuing demand DRC-07 dated

02.09.2019 (as contained in Annexure-1/1);

II. For not recover the amount in dispute as stated

in the demand notice DRC-07 dt 02.09.2019 (as

contained in Annexure-1/1) till the filing of the

Appeal before the Appellate Authority;

III. And or alternatively, a direction may be given

to respondent No. 2 the Commissioner of State

Taxes to decide the application dated 5.3.2020

on merit as contained in Annexure-5 within

specified period granted by this Hon’ble Court

and in the meantime no coercive steps shall be

taken.

IV. To any other relief to which the Petitioner is

found to be entitled.”

At the time of hearing, learned counsel for the

petitioner Shri Chiranjiva Ranjan, emphatically, under

instructions from the petitioner, states that petitioner will deposit

the amount towards tax, interest, fine, fee and penalty as

admitted by him and also a sum equal to 10% of the remaining

amount of tax in dispute arising from the impugned order and be

permitted to file the statutory appeal assailing the order subject

matter of appeal, which is sought to be preferred by the

petitioner, and upload it on the GST Web Portal as is required under Section 107 of the Central Goods and Services Tax Act,

2017/ Bihar Goods and Services Tax Act, 2017.

Learned counsel for the petitioner, under

instructions from petitioner, further states that the petitioner

shall fully cooperate and not take any unnecessary adjournment.

Statement of the learned counsel for the petitioner

is accepted and taken on record.

Sri Vikash Kumar, learned Standing Counsel-XI

appearing for the State, states that if the petitioner deposits the

amount towards tax, interest, fine, fee and penalty as admitted

by him and also a sum equal to 10% of the remaining amount of

tax in dispute arising from the impugned order, the concerned

authority will allow access to the petitioner for uploading the

statutory appeal on the GST Web Portal as is required under

Section 107 of the Central Goods and Services Tax Act, 2017/

Bihar Goods and Services Tax Act, 2017.

Let the needful be positively done within a period

of four weeks from today.

If the petitioner complies the undertaking as given

before this Court within a period of four weeks from today, we

direct the appellate authority to hear the appeal through virtual

mode on account of circumstances arising from the current Pandemic Covid-19 and decide it expeditiously, preferably

within a period of three months from the date of its filing.

Petition stands disposed of in the above terms.

Interlocutory Application, if any, stands disposed of.

(Sanjay Karol, CJ)

( S. Kumar, J)