The Allahabad High Court directed the GSTN ( Goods and Services Tax Network ) to revise the GST portal within 1 month to permit appeals even when disputed tax shows ‘Nil’ and held that a statutory right to appeal u/s 107 of the GST Act cannot be refused or blocked because of the technical glitches on the GST portal.
The bench stated that, “Therefore, on the second issue, the GSTN authorities may make appropriate changes in the program/software to enable filing of appeals even if, according to the digital records, the disputed tax liability may reflect as ‘Nil’.”
The fact specified is M/s Agarwal Aromas Private Limited, which contested the order on May 30, 2025, passed under section 74 of the UPGST Act, claiming that the appeal cannot be submitted on the GST portal due to the system showing “disputed amount cannot be zero.”
The issue began since the applicant had deposited the disputed tax amount in answer to the SCN before the order was passed. Thereafter, the portal automatically shows the disputed tax demand as Nil, blocking the process of appeal filing.
The court cited that the applicant’s statutory right to appeal could not be eclipsed just because the GST portal is made to disallow appeals in these circumstances.
The bench dismissed GSTN’s claim that the issue was merely procedural and not technical. It emphasised that the technological system used for managing appeals cannot override statutory provisions.
The bench also noted that under the previous manual system, officials were required to accept and register every appeal submitted to the appellate authority, without the discretion to reject it at the stage of filing.
It cited that while the GST Act superseded manual filing with a digital process, it did not authorise GSTN to shorten or interfere with statutory rights. The Court stated that “the only change we recognise is the replacement of human agents with machine-run, software-driven technology. No other change has been made to the substantive law.”
Subsequently, Justice Saumitra Dayal Singh and Justice Indrajeet Shukla asked the GSTN to make revisions in its portal within 1 month to ensure that appeals can be submitted even if the disputed tax amount shows as Nil, with a note that the question of maintainability shall be determined via the appellate authority itself.
The High Court, while allowing the applicant to submit the plea manually, stated that “Since filing of the appeal cannot be held hostage to the correction that is necessary to be made by the GSTN, the petitioner may file his appeal through physical mode before the appropriate appeal authority within a period of two weeks from today.”
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The appellate authority was asked to enrol and determine the appeal based on the merits without presenting objections to the limitation or mode of filing.
The fast assertion of GSTN has been applauded by the court to fix another systemic issue with the wrong order of the “reply due date” and “hearing date” in adjudication notices, and it ordered that the required remedial actions must be executed to prevent procedural errors in subsequent notices.
| Case Title | M/S Agarwal Aromas Private Limited vs Union Of India |
| Case No. | WRIT TAX No. – 5151 of 2025 |
| For Petitioner | Sumeet Mishra, Suyash Agarwal |
| For Respondent | A.S.G.I., C.S.C., Dhananjay Awasthi, Gopal Verma |
| Allahabad High Court | Read Order |
