Incorrect interest classification as tax can defeat the statutory appeal remedy by imposing an unwarranted Tribunal pre-deposit requirement.

Erroneous classification of interest as tax in Form GST DRC-07 may make the statutory appellate remedy ineffective where it compels a pre-deposit not required under Section 112(8). The notes state that the demand involved input tax credit reversal, interest and penalty, with no disputed tax component; however, interest was recorded under the tax head. Although the original order was corrected, the appellate order remained unrectified after the applicable amendment period expired. This classification could require a Tribunal pre-deposit calculated on an amount wrongly shown as tax. Writ jurisdiction was therefore considered justified, with fresh appellate consideration required.

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Issues: Whether the writ jurisdiction could be exercised despite the statutory appellate remedy where an erroneous classification of interest as tax in Form GST DRC-07 compelled a pre-deposit not contemplated by Section 112(8).

Analysis: The demand comprised reversal of input tax credit, interest and penalty, without any disputed tax component. However, the interest demand was recorded under the tax head in Form GST DRC-07. Although the original order was subsequently rectified to classify the amount as interest, the appellate order remained unrectified and the appellate authority could not amend it after expiry of the prescribed period. An appeal to the Appellate Tribunal would consequently require deposit calculated upon an amount wrongly shown as tax, rendering the alternative remedy inefficacious and prejudicial.

Conclusion: The erroneous tax classification, coupled with the inability to rectify the appellate order, justified exercise of writ jurisdiction and fresh appellate consideration.

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