2025 (11) TMI 356 - HC - GST

Procedural defects can't block statutory appeals under s.107 UPGST; portals must accept and register appeals despite disputed tax showing nil

HC directed that procedural defects in the online portal must not deny statutory appeals under s.107 UPGST. Dealing officials are duty-bound to accept and ... Direction for removal of lacuna in filing appeal online on the portal and accept the Petitioner's statutory appeal u/s 107 of the UPGST Act - denial of right to file statutory appeal for reason of the disputed amount of tax deposited by the petitioner, prior to the impugned order being passed - HELD THAT:- Procedure is handmaid of justice as held in State of Punjab and Another Vs. Shamlal Murari and Another, [1975 (10) TMI 105 - SUPREME COURT]. Earlier, when appeals were filed through physical mode, the dealing officials did not have liberty or discretion to not register an appeal presented for filing before an Appeal Authority. Whether an appeal may or may not lie and if such appeal may be entertained may remain matters falling in the realm of quasi-judicial power to be exercised by the Appeal Authority. The procedure of filing an appeal may not be employed to overreach the exercise of quasi-judicial power of the appeal authority. To that extent, the dealing officials remained duty bound to accept, register and send the record of the appeal to the quasi-judicial authority/Appeal Authority, competent to deal with the same. The GSTN authorities may make appropriate change in the program/software to enable filing of appeals even if according to the digital records, the disputed tax liability may reflext as 'Nil'. It may remain permissible to the GSTN authorities to accept and register such appeals with a note that there is no disputed tax liability reflected from the digital record and therefore the issue of maintainability of the appeal may be examined by the quasi-judicial authority i.e. the Appeal Authority. Since filing of the appeal cannot be held hostage to the correction that is necessary to be made by the GSTN, in its technical processes, in the interest of justice, in the present case the petitioner may file his appeal through physical mode before the appropriate Appeal Authority, within a period of two weeks from today. Subject to such appeal being filed, the same may be registered, dealt with and decided on its own merits without raising any objection as to limitation or for reason of such appeal being filed through physical mode. The appeal itself may be heard and decided expeditiously - Petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether a statutory right of appeal under the relevant GST statute can be denied or obstructed by technical/portal constraints in the online filing system. 2. Whether a common online portal's retrieval of a 'Nil' value for 'Disputed Demand of Tax' (reflecting digital records) can validly prevent lodging of a statutory appeal where the taxpayer asserts a surviving dispute and has deposited amounts subject to dispute. 3. Whether the online portal must be modified to prevent administrative errors in notice-generation, specifically preventing scheduling of a personal hearing prior to the last date for filing reply. 4. Interim relief: Whether, pending technical correction of the portal, the statutory appeal may be permitted to be filed in physical mode and, if so, the consequences of such filing on limitation and maintainability objections. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Statutory right of appeal vs. technical/portal constraints Legal framework: The statute confers a right of appeal to an aggrieved person against an adjudication order. Procedure for filing appeals is prescribed, and the online portal is the prescribed medium. Precedent treatment: The Court relies on established principles that an appeal is a creature of statute and that 'procedure is handmaid of justice.' Administrative or procedural mechanisms cannot be deployed to deny substantive statutory rights. Interpretation and reasoning: The Court reasons that replacement of manual filing by a machine-run software cannot alter the substantive entitlement to appeal. If the portal's design or functionality effectively prevents filing, such technicality cannot be permitted to eclipse the statutory right. The procedural mechanism (portal/software) must facilitate, not supplant, the statutory right; where the system obstructs filing, the obstacle must be remedied or alternative routes provided. Ratio vs. Obiter: Ratio - The statutory right to appeal cannot be denied on account of procedural or technical constraints of the online portal. Obiter - Observations on the broader necessity that technology not be used to enlarge procedural discretion beyond legal limits. Conclusions: The portal cannot be allowed to operate so as to deny the right of appeal. The Court directs remedial measures and permits alternative filing where necessary. Issue 2 - Effect of portal reflecting 'Nil' for disputed demand on maintainability of appeal Legal framework: Maintainability of an appeal may depend on whether a dispute survives; however, the existence of a statutory right to appeal is independent and procedural filing must be allowed to invoke the quasi-judicial determination of maintainability. Precedent treatment: Following the principle that the question whether an appeal lies is for the appellate/quasi-judicial authority to decide, not for clerical or technical processes that accept or reject filings. Interpretation and reasoning: The Court finds that if the portal auto-populates a 'Nil' disputed tax figure from digital records and thereby blocks filing, that creates an impermissible procedural obstacle. The correct approach is that the portal may allow filing and register an appeal with a notation that digital records show 'Nil', leaving the question of maintainability and disputed liability to the appeal authority's judicial/quasi-judicial adjudication. The standing and right to have the appeal adjudicated cannot be curtailed by machine-executed validation that substitutes for judicial scrutiny. Ratio vs. Obiter: Ratio - The portal must permit filing and registration of appeals even where digital fields indicate 'Nil', with the appellate authority to determine maintainability. Obiter - The portal may, as a refinement, indicate the discrepancy but must not preclude filing. Conclusions: GSTN must modify software to enable filing where disputed demand is shown as 'Nil' and accept registration with appropriate notes; until correction, physical filing must be permitted. Issue 3 - Preventing administrative error: date of personal hearing before date for filing reply Legal framework: Statutory notices/adjudication processes require reasonable opportunity to file reply before personal hearing; administrative acts must not create incurable defects by fixing a hearing date earlier than the last date for filing reply. Precedent treatment: Principle that procedure must secure fair hearing and that administrative errors which impair opportunity are remediable; courts may direct systemic safeguards in electronic systems. Interpretation and reasoning: The Court observes that in an electronic notice-generation module it is technically feasible and necessary to validate date entries such that personal hearing cannot be fixed before the date for filing reply. This is not merely discretionary advice but a preventative design requirement to avoid 'incurable defect' in proceedings caused by inadvertent entry by officers. The portal must incorporate logic/validation to ensure the date-of-hearing follows the date-for-filing-reply with a minimal permissible gap consistent with law. Ratio vs. Obiter: Ratio - A validation preventing scheduling of a personal hearing prior to the date for filing reply must be implemented in the portal. Obiter - Comments on technical feasibility and best practice in software design. Conclusions: GSTN has undertaken to deploy the modification on priority; no further direction required presently beyond monitoring implementation within the directed timeframe. Issue 4 - Interim relief: physical filing permitted and treatment of such appeals Legal framework: Courts may grant interim measures to protect substantive rights pending administrative or technical remediation; statutory limitation and mode of filing are subject to equitable and purposive consideration where technical impediments exist. Precedent treatment: Consistent with principles that procedure should not defeat substantive rights and that filings hampered by administrative errors may be accepted out of fairness. Interpretation and reasoning: Given that the portal obstruction cannot be allowed to vitiate the right to appeal, the Court permits physical filing as an interim measure. Such physically filed appeals must be accepted, registered, and adjudicated on merits without objection on limitation or on account of being filed physically when online mode was prescribed but unavailable due to portal shortcomings. The appellate/quasi-judicial authority remains the forum to determine maintainability and merits; procedural objections based solely on physical filing in the circumstances are to be foreclosed. Ratio vs. Obiter: Ratio - Physical filing is to be permitted as a temporary remedy where the online portal prevents statutory filing; such filings are to be registered and decided on merits without limitation objections. Obiter - The importance of expedited disposal thereafter. Conclusions: Petitioner may file appeal physically within the directed short period; the appeal shall be registered and decided on merits expeditiously and without objection as to limitation or mode. Implementation and Directions 1. GSTN to deploy software modification preventing scheduling of personal hearing prior to date of filing reply within a short, specified period. 2. GSTN to modify program to permit filing/registration of appeals even where digital records show 'Nil' disputed demand, with the appellate authority to examine maintainability. 3. Pending software correction, physical filing of the statutory appeal is permitted within a limited timeframe; such appeals shall be accepted, registered and adjudicated on merits without objection as to limitation or mode of filing. Cross-references See Issue 1 and Issue 2: both address the primacy of substantive right of appeal over procedural/technical barriers and require remedial action by the portal operator while preserving the appellate authority's role in determining maintainability.