Whether Appeal Amount can be Deposited Through Form DRC -03 ?

Analysis of Case Study : Manjunatha Oil Mill v. Assistant Commissioner (ST) [W.P. No. 2153 of 2024 dated February 2, 2024]

Let’s break down the case of Manjunatha Oil Mill vs. Assistant Commissioner (ST) [W.P. No. 2153 of 2024 dated February 2, 2024] and the relevant provisions under the CGST Act to explain the situation in simplified language:

Case Summary:

Facts:

• Manjunatha Oil Mill (“the Petitioner”) filed appeals against assessment orders issued by the Revenue Department.
• The appeals were rejected because the pre-deposit required for filing appeals was made using Form GST DRC-03 instead of the correct Form APL-01, due to a technical glitch.
• The Petitioner challenged this rejection through a writ petition.

Issue:

• Whether the rejection of appeals due to the technical error in pre-deposit method (using Form GST DRC-03 instead of Form APL-01) was justified.

Held:

• The Andhra Pradesh High Court set aside the rejection of appeals and remanded the matter back to the Revenue Department.
• The Court directed the Revenue Department to reconsider the appeals, taking into account the factual aspects (such as the technical glitch) and to consider condonation of any delay caused by this issue.

Relevant Provision:

Section 107(6) of the CGST Act:

• This provision outlines the conditions for filing an appeal against an order:
  • The appellant must pay in full the admitted amount of tax, interest, fine, fee, and penalty.
  • A pre-deposit equal to ten percent of the remaining tax amount in dispute must also be made, subject to certain maximum limits.

Explanation:

1. Pre-Deposit Requirement:
   • When a taxpayer wishes to appeal against an order under the CGST Act, they are required to make a pre-deposit. This pre-deposit is typically ten percent of the remaining tax amount in dispute.
   • For example, if a taxpayer disputes a tax demand of Rs. 1,00,000, they need to pay Rs. 10,000 (10% of Rs. 1,00,000) as a pre-deposit along with the appeal.
2. Forms Involved:
   • Form GST DRC-03: This form is generally used for making payments under the GST regime, including deposits against demands raised by tax authorities.
   • Form APL-01: This specific form is required for making pre-deposits related to appeals under Section 107(6) of the CGST Act.
3. Technical Glitch Issue:
   • In the case of Manjunatha Oil Mill, the pre-deposit was made using Form GST DRC-03 instead of Form APL-01 due to a technical glitch or error.
   • The Revenue Department rejected the appeals citing non-compliance with the correct pre-deposit procedure.
4. Court’s Decision:
   • The High Court considered the technical glitch as a valid reason for the incorrect form submission.
   • It ruled that the rejection of appeals solely on this ground was not justified and set aside the rejection orders.
   • The matter was sent back to the Revenue Department for reconsideration, allowing them to assess the situation based on factual aspects and potentially condone any delay caused by the technical issue.

Conclusion:

The case of Manjunatha Oil Mill highlights the importance of procedural compliance under the GST laws, especially regarding pre-deposit requirements for filing appeals. It underscores that technical glitches or errors in form submissions should not unjustly hinder a taxpayer’s right to appeal. The Court’s decision ensures fairness and adherence to legal principles while allowing for appropriate consideration of genuine challenges faced by taxpayers in complying with statutory requirements.