Tax Vista

Your weekly tax recap

Edn. 286 - 20th July 2026

Kasi Viswanathan V

Is There an Issue with "Issue"?

The order under Section 73 was digitally signed on 30.04.2024 at 21:15:13 hrs, the last date available after extension of limitation for the tax period 2018-19. The order together with its summary in FORM GST DRC-07, however, came to be uploaded on the common portal only on 01.05.2024. The taxpayer challenged the proceedings contending that the order had not been "issued" within the period prescribed under section 73(10). Though the plea of limitation had not been urged before the appellate authority, the High Court permitted it to be raised since it went to the root of the matter, i.e. jurisdiction of the proper officer.

The High Court rejected the contention that the expressions "issue" and "service" are interchangeable. It observed that the two expressions carry different connotations and that Section 169 separately prescribes the manner of service. The Court also noticed that the earlier indirect tax enactments consistently employed the expression "service", whereas section 73 of the CGST Act consciously employs both expressions in various sub-sections. Holding that the legislative departure was intentional, the Court concluded that section 73 requires only the issuance of the order within the prescribed period. The decisions rendered under the Income-tax Act were distinguished.

The Court accordingly held that the order, having been digitally signed within the period of limitation, had been issued in time. Subsequent uploading on the common portal related to service of the order and did not render the proceedings time-barred. While an order becomes enforceable only upon service, limitation under section 73 is satisfied once the order is issued within the prescribed period. The writ petition was therefore dismissed.

One aspect of the reasoning may require further examination. Having observed that an order passes through three distinct stages making, issuance and communication, the Court further observed in para 11 that issuance ordinarily means making the order out of the authority's hands by signing, dating and sending it for dispatch. This itself suggests that issuance contemplates something more than the mere act of making or signing. Yet, in paragraph 19, issuance appears to have been equated with the making of the order itself.

While "issue" and "service" may indeed have different connotations, it does not necessarily follow that issuance is complete upon signing the order itself. There is an intermediary stage between making the order and its service, namely setting it in motion for delivery. Although the issue was framed in those terms, the discussion ultimately appears to have focused largely on service.

The conclusion that service is not required within the period of limitation appears unexceptionable, the statute itself employing the expression "issue". Whether issuance also stands completed merely upon signing, however, may require further examination.

Two other aspects also merit attention. First, the GSTN portal itself separately reflects the date of issuance of an order, though the significance of this feature does not appear to have been examined. Secondly, while the Court confined the role of the Information Technology Act, 2000 to authentication under Rule 26, the observations of the Supreme Court in G.S. Chatha Rice Mills recognising the significance of electronically generated records and precise electronic time stamps in a technology-driven tax administration may also have some relevance in examining when an electronically authenticated order can truly be said to have been "issued" [Re: 2026-VIL-691-CAL]

Penalty Appeals: Pre-deposit for Earlier Orders?

The GST Appellate Tribunal has taken up for consideration an issue that is likely to arise in several pending appeals. Can the requirement of mandatory pre-deposit for appeals involving only penalty, introduced with effect from 01.10.2025, be insisted upon where the penalty order itself had been passed before that date?

The appeal arose from an order imposing penalty under Section 122 (1)(ii) and 122 (1)(vii). While the Registry raised a defect regarding non-payment of pre-deposit, the appellant contended that the requirement was introduced only with effect from 01.10.2025, whereas the impugned order had been passed earlier. It was also urged that the order was non-est for want of proper appointment of the adjudicating authority during the relevant time [Circular No. 254/11/2025-GST dated 27.10.2025]. Without expressing any opinion on the merits, the Tribunal considered it appropriate to call for the Department's response before deciding whether the appeal could be admitted without insisting upon pre-deposit.

If the amendment introducing pre-deposit for penalty-only appeals is viewed as procedural, it would ordinarily govern appeals filed on or after 01.10.2025 irrespective of the period to which the dispute relates. On the other hand, if the amendment is regarded as introducing a substantive condition affecting the right of appeal, its applicability may be confined to proceedings where the lis itself commenced after the amendment came into force.

The controversy assumes significance because pre-deposit is a condition for maintaining the statutory appeal. The central question before the Tribunal would therefore be whether the amendment merely regulates the exercise of the right of appeal or introduces a substantive condition for maintaining it.

The order is only at the stage of admission. Considering the large number of penalty orders passed prior to 01.10.2025 which are yet to reach the appellate stage, the issue assumes considerable importance.

It also remains to be seen whether the substitution of the proviso to Section 107(6) and the insertion of the proviso to Section 112(8), though brought into force on the same date, carry any different implications while determining the applicability of the pre-deposit requirement. The position in appeals arising from penalty under Section 129 for the period from 01.01.2022 to 30.09.2025 may likewise require separate consideration. In many such cases, however, the amount required for release of the goods or conveyance would already have been paid, thereby limiting the practical significance of the issue.

Apart from the issue of pre-deposit, the challenge to the validity of the adjudication on the ground of want of proper appointment of the proper officer would also merit examination once the matter proceeds beyond the stage of admission. [Re: 2026-VIL-39-GSTAT-HYD]

[Read previous edition dated 13.07.2026]

(The views expressed are personal. The author can be reached for feedback or queries on v.k.vishwa@gmail.com)