The GST Appellate Tribunal (GSTAT), Hyderabad has held that tax paid through belated GSTR-3B returns, without any contemporaneous protest or dispute regarding the liability, cannot subsequently be treated as a statutory pre-deposit for filing an appeal.
The ruling came in the case of Venshiv Chemicals Pvt. Ltd. vs. N. J. Kumaresh & Ors., where the appellant sought to adjust ₹83,43,942 already paid during investigation against the mandatory pre-deposit requirement under Section 112(8) of the CGST Act.
The Tribunal rejected the contention, observing that the amount represented an admitted tax liability rather than a disputed payment made under protest.
Dispute Over ₹83.43 Lakh Tax Payment
The proceedings arose from multiple allegations under the CGST Act, including irregular availment of input tax credit, non-payment of tax and issues concerning transitional credit.
The adjudicating authority confirmed nine demands while dropping three others and also ordered recovery of applicable interest and penalties. The First Appellate Authority subsequently upheld seven demands and set aside two.
When the matter reached GSTAT, the Registry pointed out that the appellant had not fulfilled the prescribed pre-deposit requirement under Section 112(8).
The appellant argued that ₹83,43,942 had already been paid during the investigation and was later appropriated against the confirmed demand. Therefore, according to the appellant, the amount should be considered while determining the mandatory pre-deposit.
Tribunal Finds Payment Was an Admitted Liability
The Tribunal examined the appellant's conduct throughout the proceedings and found no evidence that the ₹83.43 lakh payment had been made under protest.
The amount had been paid belatedly through GSTR-3B. The show-cause notice proposed a demand of ₹83,43,942 and appropriation of the amount already paid. According to the Tribunal, the appellant did not dispute the underlying tax liability in its response to the notice and instead accepted the liability to pay interest arising from the delayed payment.
The Tribunal also noted that the appellant had described the payment as voluntary and belated in the statement of facts and grounds submitted before GSTAT.
These statements, according to the Tribunal, were inconsistent with the later claim that the payment represented a disputed liability deposited under protest.
VVF India Ruling Distinguished
The appellant relied on the Supreme Court's decision in VVF (India) Ltd. v. State of Maharashtra, arguing that amounts paid under protest before assessment could be adjusted towards a mandatory pre-deposit.
GSTAT distinguished that decision from the present case.
According to the Tribunal, the Supreme Court case involved payments that were demonstrably made under protest before the assessment order. In the present matter, the appellant could not produce any contemporaneous document showing that the ₹83,43,942 payment was made under protest or that the tax liability had been disputed at the relevant time.
The Tribunal therefore held that merely filing replies, statements of facts or grounds of appeal was not sufficient to establish that an otherwise admitted tax payment was a disputed payment.
Mandatory Pre-Deposit Requirement Applies
The Tribunal also rejected the argument that the First Appellate Authority had effectively treated the ₹83.43 lakh payment as a pre-deposit.
It observed that the appellate order did not contain any specific finding or waiver treating the amount as fulfilment of the statutory pre-deposit requirement.
Under the GST appeal framework, the prescribed pre-deposit is a condition for maintainability of the appeal. At the first appellate stage, Section 107(6) requires payment of the admitted tax liability and the prescribed percentage of disputed tax. A further statutory pre-deposit is required under Section 112(8) for an appeal before GSTAT.
The Tribunal also referred to the decision in M/s. Triveni Engineers v. Assessing Authority, CT&GST, where the statutory pre-deposit was treated as a condition precedent for entertaining an appeal.
GSTAT Directs Appellant to Make Required Deposit
GSTAT concluded that the appellant had failed to establish that the ₹83,43,942 payment represented a contested liability or had been made under protest.
Accordingly, the amount paid through GSTR-3B could not be adjusted against the mandatory pre-deposit required under Section 112(8).
The Tribunal further observed that there appeared to be an issue even with the pre-deposit requirement at the first appellate stage. The appellant was therefore directed to make the requisite deposits under Sections 107(6) and 112(8) before the GSTAT appeal could be admitted.
The appellant was granted ten days to make the required payment, following which the Registry was directed to verify the proof of payment and place the matter before the Bench.
Key Takeaway for Taxpayers
The ruling highlights the importance of clearly documenting the nature of tax payments made during GST investigations and proceedings. A payment made through GSTR-3B may not automatically qualify as a disputed payment or statutory pre-deposit merely because the amount is later appropriated against a demand.
For businesses dealing with GST disputes, maintaining clear records of objections, correspondence and any payment made under protest can be important when determining the availability of such amounts for subsequent appellate requirements. Proper compliance review and bookkeeping services in india can also help businesses maintain accurate tax-payment records and supporting documentation.
Case Details
Case: Venshiv Chemicals Pvt. Ltd. vs. N. J. Kumaresh, Principal Commissioner of Central Tax & Ors.
Date of Decision: September 8, 2026
Forum: GST Appellate Tribunal (GSTAT), Hyderabad
Citation: 2026 Taxo.online 2709
Key Issue: Whether tax paid through belated GSTR-3B, without evidence of protest or dispute, can be adjusted against the mandatory GSTAT pre-deposit under Section 112(8) of the CGST Act.