2026-VIL-168-GSTAT-BLR
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  2. 2026-VIL-168-GSTAT-BLR

SGST Tribunal

GST - Dismissal of first appeal without hearing the Appellant under Section 107(8) - The First Appellate Authority rejected the adjournment sought on behalf of the Appellant and dismissed the appeal without a hearing on the grounds of delay, defective authority of the signatory and non-payment of an admitted amount - Whether the First Appellate Authority could dismiss the appeal without hearing the Appellant - HELD - Section 107(8) is short and unqualified. It draws no line between a decision on the merits and a decision on a threshold objection - The First Appellate Authority reasoned that a hearing is unnecessary where the appeal fails for “absence of authority to entertain” it. The statute does not support that view - Even if the adjournment was rightly refused, the First Appellate Authority had to give the Appellant another date before dismissing the appeal. The adjournment could not be refused because the authorisation in favour of the consultant firm was not signed by all the persons named. That document concerns the relationship between the company and its advisers and has nothing to do with the right of the company to be heard - The Order-in-Appeal was passed in breach of Section 107(8) and the principles of natural justice and cannot stand - Condonation of delay in filing the first appeal under Section 107(4) - The first appeal was filed beyond three months by a period within the further one month allowed. The Appellant filed a petition for condonation along with the appeal stating that the delay was due to the illness of the consultant and the time taken to gather documents. The First Appellate Authority held that no application for condonation was filed along with an affidavit - Whether the delay ought to have been condoned - HELD - Section 107(4) empowers the Appellate Authority to condone a delay up to one month beyond the three months if sufficient cause is shown. The finding that no application for condonation was filed is contrary to the record. Form GST APL-01 itself asks whether the appeal is filed late and the reasons for the delay - Neither the Act nor Rule 108 prescribes a separate application or an affidavit. The First Appellate Authority imposed a requirement that has no statutory source and did not consider the petition filed. Sufficient cause must receive a liberal construction to advance substantial justice. The length of delay is not decisive and what matters is whether the explanation is acceptable. Condonation is not a matter of right, but the Appellant made out its own case. The cause shown was ordinary, plausible and uncontradicted. Nothing suggested a dilatory motive and the Revenue suffered no prejudice - The delay in filing the first appeal is condoned - Validity of signing and verification of the first appeal on behalf of a company by its General Manager - The First Appellate Authority held that the General Manager signed the appeal without a certified board resolution or a notarised power of attorney. The Appellant relied on a General Power of Attorney executed by its Managing Director authorising the General Manager to represent, sign and file applications on all tax matters before tax authorities - Whether the appeal was validly signed and verified on behalf of the company - HELD - Rule 108 read with Rule 26 provides that the appeal of a company is to be signed by its Chief Executive Officer or authorised signatory and verified by digital signature - The appeal was filed on the portal under the Appellant's own registration. The General Manager held a General Power of Attorney executed for the company by its Managing Director. The company has prosecuted the second appeal through him - A company can ratify the act of an officer who has signed and verified on its behalf, and ratification may be inferred from its conduct in pursuing the proceeding. Procedural defects which do not go to the root of the matter should not defeat a just cause. The decision on the authority of a person to institute a suit on behalf of a company is distinguishable as there the authority was not shown to flow from the company. The fact that another authorised signatory signed the reply does not show that the General Manager lacked authority. The observation that he could not depose to the facts confuses the merits of a plea with the authority of the person who makes it. If the First Appellate Authority doubted the authority, the proper course was to point out the defect and call for proof - The appeal was validly signed and verified. Any omission to file proof of authority was a curable defect - Whether the appeal is barred under Section 107(6) for non-payment of an “admitted” amount or pre-deposit where only interest was confirmed - HELD - The reply to the show cause notice, read as a whole, is not an admission. It opened by stating that the appellant was “not liable to pay interest or penalty” - A statement made during the audit, in answer to a higher figure and while seeking relief from the whole interest, accepts the method of computation but does not concede that interest is owed. It is not an admission in a pleading and is not conclusive. The adjudicating authority adopted the arithmetic does not turn it into an admission of liability. Clause (b) of Section 107(6) requires a sum of ten per cent of the remaining amount of tax in dispute. Interest is not tax. As no tax was confirmed, no pre-deposit was payable - The Appellant admitted no amount within the meaning of Section 107(6)(a) and no pre-deposit was payable under Section 107(6)(b). The first appeal was validly filed - Power of the Tribunal under Section 113(1) to decide the merits of the first appeal instead of remanding - The First Appellate Authority dismissed the first appeal on threshold grounds. The Tribunal set aside that order. The record was complete and the parties had argued the merits - Whether the Tribunal should decide the merits of the first appeal - HELD - Section 113(1) empowers the Tribunal to confirm, modify or annul the order appealed against. The power to refer the case back is discretionary and is to be used where the record does not allow a decision on merits. The audit report, the show cause notice, the reply with annexures and the computation in the Order-in-Original were on record. No fact was in dispute and no further inquiry was required. Neither party asked for a remand. The dispute concerned a single year and interest alone and had been pending for a long time - The Tribunal decides the merits of the first appeal in the order - Interest under Section 50(1) on differential tax paid late through Form GST DRC-03 after the rate of tax on works contract services was increased - The Appellant contended that its customer did not pay the differential tax, that it paid from its own funds, that the supply was continuous with tax falling due as payment fell due, and that the consideration should be treated as cum-tax under Rule 35 - Whether interest is payable on the differential tax paid through DRC-03 and whether Rule 35 reduces it - HELD - Liability to interest arises from the failure to pay tax within the period prescribed. Interest is compensatory and makes good to the exchequer the use of money it should have had. Payment of differential tax through DRC-03 does not extinguish the liability to interest. The Appellant accepted the higher rate and paid tax at that rate. The customer's failure to pay does not affect liability. Tax falls due at the time of supply fixed by the Act and not when the customer pays - The Act does not give any authority the power to waive interest on the ground of hardship. The only statutory waiver is in Section 128A and it is confined to the period from 01.07.2017 to 31.03.2020. The parties to a contract may agree on who finally bears the tax, but this does not alter liability to the Government - Where the invoice is issued within the prescribed period, Section 13(2)(a) fixes the time of supply as the date of invoice or receipt
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