Pre-Deposit Before Final Acknowledgement Saves The Appeal

A Refund Recovery Dispute Produced a Pre-Deposit Objection

Payment of the prescribed pre-deposit is mandatory to pursue an appeal before the GST Appellate Tribunal. A different question arises when the appeal is electronically presented without the deposit; the Registry issues only a provisional acknowledgement, and the appellant pays the amount within the time allowed for removing the defect. The answer depends upon when the appeal is legally treated as "filed."

This issue arose in AMAZON DEVELOPMENT CENTRE (INDIA) PVT. LTD. Versus DEPUTY COMMISSIONER OF CENTRAL TAX PERUNGUDI DIVISION CHENNAI SOUTH COMMISSIONERATE, OFFICE OF THE JOINT COMMISSIONER PERUNGUDI DIVISION CHENNAI SOUTH COMMISSIONERATE, DEPUTY COMMISSIONER & ORS. - 2026 (10) TMI 554 - GSTAT CHENNAI. The matter came before the GSTAT, Chennai Bench, comprising Hon'ble Praveen Kumar Jain, Member (Judicial), and Hon'ble Shaik Khader Rahman, Member (Technical), in Appeal No. APL/473/CHE/2026.

The original authority had sanctioned a refund on 06.07.2021. The Department's appeal against that order was allowed by Order-in-Appeal No. 107/2022 dated 31.03.2022. The order directed recovery of Rs. 43,36,084, comprising equal amounts of CGST and SGST, on the ground that the refund for October 2019 to March 2020 was erroneous. Interest and penalty were also directed. The taxpayer thereafter approached the Tribunal under Section 112(1) of the CGST Act, 2017.

The Appeal Passed Through Provisional and Final Filing Stages

The appellant submitted Form GST APL-05 on 24.06.2026. The Registry issued a Provisional Acknowledgement in Part A of Form GST APL-02 under Rule 110(1) of the CGST Rules, 2017. At that stage, the appeal had entered the Registry system, but its documents and statutory compliance remained subject to scrutiny.

During scrutiny, the Registry issued a Defect Notice dated 16.07.2026 because the appellant had not paid the pre-deposit prescribed under Section 112(8). The appellant responded on 03.08.2026 that the appeal related to recovery of a refund already sanctioned. Accordingly, the matter did not involve "tax in dispute" as contemplated by Section 112(8)(b), and consequently no pre-deposit was required.

After hearing the appellant on 04.08.2026, the Registry directed payment of 10% of the disputed amount. The appellant complied without prejudice to its legal contention. It deposited Rs.4,33,610 through Form GST DRC-03 on 06.08.2026 and informed the Registry on 10.08.2026. The payment was thus made after the Provisional Acknowledgement but before issuance of the Final Acknowledgement.

Pre-Deposit Must Exist When the Appeal Is Legally Filed

Section 112(8) sets out two distinct payment requirements for an appeal before the GST Appellate Tribunal. First, the appellant must pay the entire amount of tax, interest, fine, fee and penalty that it admits to be payable. Second, it must deposit the prescribed percentage of the remaining disputed tax. Payment of the admitted liability cannot substitute for the prescribed percentage of disputed tax, as the two requirements operate independently. These payments protect the revenue during the pendency of the appeal without requiring the appellant to discharge the entire disputed demand before obtaining appellate review.

The Department relied on the mandatory words "no appeal shall be filed" unless the required payments have been made. Amazon submitted Form GST APL-05 on 24.06.2026 but deposited only Rs. 4,33,610 on 06.08.2026. The extended deadline for filing appeals against orders communicated before 01.05.2026 was stated to be 31.07.2026. Because the deposit was made after both the electronic submission of the appeal and the stated deadline, the Department argued that the appeal was filed without satisfying an essential statutory condition. Under this view, a later payment could not validate an appeal that was defective when originally presented.

The dispute therefore turned on what legally constituted "filing" of the appeal. If submitting Form GST APL-05 and issuing the Provisional Acknowledgement completed the filing process, the Department's objection would be valid because the pre-deposit was absent on that date. If, however, the Provisional Acknowledgement merely recorded receipt of the papers and the appeal became legally filed only when the Final Acknowledgement was issued after scrutiny, the payment made before that final stage could cure the defect. The case accordingly turned on the distinction between provisional presentation and final filing under Rule 110 of the CGST Rules, 2017.

A Provisional Acknowledgement Confirms Receipt, Not Completed Filing

Rule 110 creates two distinct stages for filing an appeal before the GST Appellate Tribunal. At the first stage, the appellant submits Form GST APL-05 electronically. The system then issues a Provisional Acknowledgement and a filing reference. This document confirms that the Registry has received the appeal, but it does not certify that the appeal is complete, legally maintainable, or supported by all required documents and payments.

The Registry thereafter examines the appeal. It may verify the impugned order, supporting documents, limitation, pre-deposit payment, and other filing requirements. If a defect is found, the appellant may be directed to remove it within the permitted time. For example, if proof of pre-deposit is missing when Form GST APL-05 is submitted, the Provisional Acknowledgement does not prevent the Registry from issuing a Defect Notice and allowing the appellant to furnish proof or make the required payment.

The Explanation to Rule 110(4) gives legal significance to the second stage. It provides that the appeal is treated as "filed" only when the Final Acknowledgement containing the appeal number is issued. Thus, the Provisional Acknowledgement initiates the scrutiny process, while the Final Acknowledgement confirms completion of filing after scrutiny. The Department treated the initial electronic submission as final filing, but that approach ignored the distinction created by Rule 110. Since Amazon paid the pre-deposit before the Final Acknowledgement, the defect was removed before the appeal attained the legal status of a filed appeal.

A Curable Defect Must Be Allowed to Be Cured

Registry scrutiny is not intended only to discover reasons for rejecting an appeal. It also gives the appellant an opportunity to correct deficiencies before the Tribunal finally registers the appeal. Some defects may be fundamental, such as an appeal against an order that is not legally appealable or an appeal filed beyond a period that the Tribunal has no power to condone. Other defects may be corrected by supplying a missing document, completing the verification, paying the prescribed fee or complying with a payment requirement within the time allowed.

For example, an appellant may submit Form GST APL-05 without attaching a complete copy of the impugned order or without providing proof of the required pre-deposit. The Registry may notify the defect and grant time for compliance. If the appellant supplies the document or makes the payment within that period and before issuance of the Final Acknowledgement, the purpose of scrutiny has been achieved. Treating the appeal as permanently invalid despite timely correction would make the defect-removal procedure largely meaningless.

Amazon received the Defect Notice on 16.07.2026 and initially disputed the requirement to make a pre-deposit. After the Registry directed payment, the appellant deposited Rs.4,33,610 through Form GST DRC-03 on 06.08.2026, within the time granted under Rule 24(2) of the GSTAT (Procedure) Rules, 2025. The jurisdictional Assistant Commissioner verified the payment, and the Final Acknowledgement had not yet been issued. The appeal had therefore become compliant before it reached the stage of final filing, and the defect relating to pre-deposit stood removed.

Pre-Deposit Made Before Final Filing Constituted Valid Compliance

The relevant question was not merely whether the pre-deposit was made after the electronic submission of Form GST APL-05. The real question was whether it had been made before the appeal became legally "filed" under Rule 110(4). The appellant initially disputed the requirement but complied with the Registry's direction during scrutiny. It deposited Rs.4,33,610 through Form GST DRC-03 before the Final Acknowledgement was issued. Thus, the appellant was not seeking registration of the appeal while continuing to withhold the required payment.

The Department treated the date of electronic submission and issuance of the Provisional Acknowledgement as the filing date. On that basis, it argued that the appeal had been filed without fulfilling Section 112(8) and that the later payment could not cure the defect. Rule 110(4), however, gives the two acknowledgements different legal effects. The Provisional Acknowledgement records receipt of the appeal and begins scrutiny, whereas the Final Acknowledgement, containing the appeal number, marks the stage at which the appeal is treated as legally filed.

For example, if an appeal is provisionally submitted on 1 August, a defect notice is issued on 5 August, the appellant makes the required payment on 10 August, and the Final Acknowledgement is issued on 12 August, the appeal is compliant when it legally reaches the filing stage. Applying the same principle, Amazon deposited the required amount within the time allowed to remove the defect and before issuance of the Final Acknowledgement. Section 112(8) was therefore satisfied. The Department's objection was rejected, and the Registry was directed to remove the defect, register the appeal, assign an appeal number and place it for hearing on merits

The Ruling Decided the Timing of Pre-Deposit, Not Its Applicability to Refund Appeals

The appellant's primary contention was that no pre-deposit was required. According to the appellant, the dispute concerned the recovery of a refund already sanctioned and paid. It was therefore argued that the appeal did not involve any "tax in dispute" within the meaning of Section 112(8)(b). This raised an important legal question: whether an order directing recovery of an allegedly erroneous refund is to be treated in the same manner as an ordinary tax demand for calculating the prescribed pre-deposit.

The Tribunal did not finally answer this wider question. During scrutiny, the Registry directed the appellant to deposit Rs.4,33,610, and the appellant made the payment under protest, without abandoning its legal contention. Once the amount had been paid within the defect-removal period and before issuance of the Final Acknowledgement, the appeal could be registered without deciding whether such payment was legally required in the first place. The matter was therefore resolved on the narrower ground concerning the timing of compliance.

The ruling must consequently be used with care. It does not establish that pre-deposit is compulsory in every appeal involving recovery of an allegedly erroneous refund. It also does not accept the opposite proposition that such appeals are always outside Section 112(8)(b). The principle actually decided is limited but important: where the Registry requires a pre-deposit and the appellant makes that payment within the permitted defect-removal period and before the Final Acknowledgement, the payment cannot be treated as belated merely because it was made after issuance of the Provisional Acknowledgement.

Final Acknowledgement Is More Than an Administrative Receipt

The ruling gives substantive importance to the acknowledgement structure under Rule 110. A Provisional Acknowledgement confirms presentation and enables scrutiny. A Final Acknowledgement confirms that the appeal has crossed the filing stage and has received its appeal number. Treating both documents as legally identical would make the word "final" and the Explanation to Rule 110(4) largely ineffective.

This distinction also promotes fairness. Electronic filing systems frequently allow preliminary submission before the Registry verifies documents, payments and other requirements. If every curable deficiency existing at preliminary submission made the appeal permanently invalid, the statutory scrutiny process would become a mechanism for rejection rather than correction.

At the same time, the decision does not dilute Section 112(8). The prescribed deposit still had to be made before final filing. Had the appellant failed to comply within the time granted, or sought Final Acknowledgement without satisfying the direction, a different consequence could have followed. The ruling protects timely rectification; it does not excuse continued non-compliance.

A Curable Filing Defect Should Be Corrected Rather Than Converted into a Bar

The decision preserves statutory compliance without allowing a curable defect to defeat the appeal. An appellant receiving a pre-deposit defect notice should respond within the permitted period, preserve any legal objection by making payment under protest where necessary, and promptly submit proof to the Registry. If the required amount is deposited before issuance of the Final Acknowledgement, the appeal should be registered and heard on merits rather than rejected merely because payment was not made at the provisional submission stage..

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