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Order for SCN was passed for 6 different issue. from this for 2 issue liability payment was already made before order but same not consider in order and liability was raised. further, for 1 issue taxpayer agreed and made payment. Payment was made via DRC-03. Now While filing Appeal for balance issues. in the tab liability to pay, the admitted liability is also shown to pay by cash.
What to do? . Should I file DRC-3A first and then file the appeal? will it reduce the liability?
Please guide.
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You may file an application of rectification of error under Section 161, if the stated facts are on record.
Yes - in your case, filing DRC-03A first is strongly advisable before filing appeal.
Since payments were already made through DRC-03:
Filing DRC-03A generally helps:
Otherwise, the portal may incorrectly require:
1. we understand that in present case, you have admitted liability qua 3 (2+1) issues wherein payment for 2 issues was made before issuance of Order-in-Original and for 1 issue, payment was made after issuance of such order.
2. In this case, you can file form GST DRC-03A qua all 3 issues and knock off confirmed demand qua 3 issues (presuming that payment for 3rd issue has not been made from Electronic Liability Register). Once the payments confirmed qua 3 issues are knocked off, you may proceed to file appeal by declaring admitted tax as well as disputed tax.
3. If your issue does not resolve, then, the most advisable course of action would be to first file a Rectification Application under Section 161 of the CGST Act before the adjudicating authority. A rectification application under the CGST Act is maintainable only in cases involving an "error apparent on the face of the record" within the meaning of Section 161. Accordingly, while drafting the application, it must be strongly stressed that the relied-upon documents and payment challans were either already submitted along with the reply to the SCN/ or furnished during the course of Personal Hearing/ or otherwise available on the taxpayer's GSTN portal, which is accessible to the adjudicating authority.
Sir,
Better to apply for rectification as suggested at Sl. No. (1) by Sri Sadananda Bulbule Sir, before appeal.
Yes, rectification can work in these circumstances, especially where:
This is generally treated as an "error apparent on record" and can be covered under rectification provisions.
However, practically:
But there are practical risks:
Officers sometimes do not dispose rectification quickly, while appeal limitation continues running.
Even after rectification request, technical liability may continue unless DRC-03A/payment mapping is done.
Do not wait indefinitely for rectification disposal if appeal due date is approaching.
Best practical course:
In practice, many professionals prefer:
Rectification + DRC-03A first, but without risking appeal limitation.
Therefore:
In addition to the above reverts, please also do consider the following:-
Where tax liability pertaining to certain issues had already been discharged prior to passing of the adjudication order through valid DRC-03 payments, and such payments were not appropriated or considered in the impugned order, the same should not again be treated as payable while filing appeal under Section 107 of the CGST Act. Further, in respect of the issue admitted by the taxpayer and already paid through DRC-03, such amount also cannot be demanded again as "admitted liability" in the appeal module. In such circumstances, it is advisable to first file Form DRC-03A for proper linkage/adjustment of the earlier DRC-03 payments against the corresponding demand raised in the order, so that the electronic liability gets correctly reflected on the portal.
Upon successful filing and processing of DRC-03A, the demand to the extent already discharged is generally reduced/adjusted in the system, thereby avoiding duplicate cash payment at the time of filing appeal. Thereafter, the appeal may be filed for the balance disputed issues by making only the mandatory pre-deposit applicable on the contested amount. It is also advisable to specifically mention in the Statement of Facts and Grounds of Appeal that the adjudicating authority failed to appropriate the tax already paid through DRC-03, resulting in erroneous duplication of liability.
Sir,
A detailed answer and clarifications by Sri YAGAY and SUN Sir with all possibilities relating to the issue.
Section 107 of the GST Act confers a right of appeal against "any decision or order passed under this Act," prescribing a limitation period of three months from the date of communication, with a further condonable delay of one month.
Where a rectification application is filed and subsequently decided, the limitation for filing an appeal against the original order must be reckoned from the date on which the rectification application is disposed of.
You can refer to the case law of M/s SPK and Co. v. State Tax Officer - 2024 (12) TMI 140 - MADRAS HIGH COURT, decided by the Madras High Court.
However, there may be a possibility of consideration in the appeal for the issues involved in the rectification order only if you applied after rectification. So, it is better to apply for both rectification and appeal on the respective issues within the timeline, and you can make additions in the appeal if the issues are not resolved in the rectification.
Thanks a lot everyone for explaining in detail what can be done in this matter. I would like to clarify that the liability which was agreed before issuance of OIO, only payment (Tax + Interest + penalty) was made in Electronic Cash ledger but due to some technical issue DRC-03 was not filed at that time. but the technical issue was brought in notice of PO and grievance along with SS was also filed that not able to file DRC-03. So my understanding was to mention this in appeal. and for payment made after OIO to file DRC-03A. Please guide is it fine.
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With reference to serial no.9 above, no need to mention this in the Appeal to be filed. No useful purpose would be served. The amount cannot be appropriated on the basis of "agreed upon".
Only relevant and solid points should be raised in the Appeal. Try to be brief as far as possible. No deviation from the main issue.
Dear Queries,
Your understanding is legally sound, however the advice given to avoid unnecessary narration in appeal is more practical and strategically correct.
The core issue is that mere payment through Electronic Cash Ledger, without successful filing of DRC-03, does not automatically amount to valid appropriation or voluntary payment under Section 73/74. Since the amount was not formally linked through DRC-03 before issuance of OIO, the department may contend that statutory compliance remained incomplete. Therefore, the appellate authority generally examines whether the payment was legally appropriated in accordance with prescribed procedure, not merely whether tax was deposited.
At the same time, the fact that technical difficulty prevented filing of DRC-03, and that the issue was contemporaneously brought to the notice of the Proper Officer along with grievance and screenshots, certainly supports bona fides and absence of suppression or deliberate default. However, if this point is not directly connected with the grounds challenging the OIO, elaborating it in appeal may dilute the focus of the case.
Hence, from a litigation strategy perspective, it is advisable to keep the appeal confined to substantial legal and factual grounds arising from the OIO. The appellate memorandum should remain concise, issue-centric, and avoid narrating matters which do not materially affect adjudication of the dispute.
Regarding the payment made after issuance of OIO, filing DRC-03A is the correct procedural course for seeking adjustment/appropriation of the amount already deposited. This creates proper accounting linkage and strengthens the record for future reconciliation.
Therefore, professionally viewed:
The suggested approach appears legally balanced and procedurally appropriate.
Regards
YAGAY AND SUN
(Consultant, Cyclist and Environmentalist)
M/s Yagay And Sun,
Dear Sirs,
Thanks a lot for such a high quality reply and, that too, with selfless approach. Passion for such selflessness is rare in this materialistic world.
I always peruse your reply word for word with gusto and learn a lot everyday. I have a firm faith in the saying, "Learning is a life long process".
Sir,
Late fee under Sec. 47(2) is leviable for the delayed period for both Form 9 and 9C, till the date of filing of both returns, wherever they are required to be filed, but cannot be calculated separately for both returns. If any one of the returns filed belatedly, the period is to be reckoned for the returns last filed, either Form-9 or Form-9C, from the due date of the annual return to be filed u/s 44 of the CGST Act. However, returns already filed before 31-03 2025, no additional or excess fee is payable for the delayed period as per Notification No. 08/2025-Central Tax dated 23.01.2025 for the periods up to 2022-23.
In the instance case, the GSTR-9C was filed 2 days after the GSTR-9 was filed. So the delayed period is to be reckoned up to the date of GSTR-9C filed, and the late fee is payable for this period (if filed after 31-03-2025), but not payable separately for individual returns.
Levy of Rs. 25000-00 +250000-00 is now not in vogue as per the clarification in Circular No. 246/03/2025-GST dated 30-01-2025.
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