GST Notices, Appeals & Litigation

The notices businesses actually receive

Scrutiny of returns. Where the department's system finds a discrepancy — most often between the tax declared and the credit claimed, or between the returns and the annual return — a notice for explanation is issued. This is the cheapest stage at which to resolve a matter, and a reasoned reply with reconciliations frequently ends it.

Mismatch of input tax credit. The most common category by a wide margin. Credit claimed that does not appear in the statement generated from suppliers' filings is treated as excess credit. The answer is usually documentary — the invoice, the payment, the supplier's own position — but it has to be assembled, not asserted.

Intimation before a show cause notice. The department may communicate an ascertained liability and invite voluntary payment before formal proceedings begin. This stage is genuinely worth taking seriously: paying what is properly due here avoids penalty exposure that arises later, and disputing what is not due is easier before a formal notice than after.

Show cause notice. The formal demand, issued where tax is said to be unpaid, short paid, or credit wrongly availed. The consequences differ sharply according to the provision invoked — a demand alleging no fraud or suppression carries a modest penalty, while one alleging fraud or wilful misstatement carries a penalty equal to the whole of the tax. Whether the department has correctly invoked the more serious provision is very often the central question, and it is worth contesting at the outset.

Audit and departmental enquiry. Notices arising from audit of records, which tend to cover several years at once and to raise a mixture of substantive and documentary points.

Cancellation of registration. Ordinarily for continued non-filing. Cancellation is followed by an application for revocation, which has its own time limits and requires the outstanding returns to be filed. A cancelled registration cannot issue a valid tax invoice, so customers lose credit — which usually makes this the most urgent notice a business can receive.

Demand order. The order concluding proceedings, which crystallises the liability and starts the clock for appeal.

GST litigation & appeals procedure

Handling a GST notice or appeal requires a systematic legal and accounting approach through the statutory hierarchy:

GST dispute & appeal statutory hierarchy

The table below outlines the statutory forums, filing forms, limitation periods, and mandatory pre-deposit requirements under CGST / SGST law:

Replying properly matters more than replying quickly

A reply that answers the notice on its own terms — provision by provision, with the documents attached and the reconciliation shown — does more than one that asserts the demand is wrong. Three things make the difference in practice.

The reconciliation must exist. Where credit is disputed, the purchase register has to be reconciled to the statement generated from suppliers' returns, and each difference explained by reference to a document. This is accounting work, not argument.

The provision invoked must be tested. Where the department has alleged fraud or suppression in order to reach back further in time or to levy the higher penalty, whether the allegation is sustainable on the facts is often the most valuable point in the case.

The record must be built at this stage. Facts and documents introduced later carry less weight, and an appellate authority is generally reviewing the record rather than hearing the matter afresh. What is not on the record at adjudication is difficult to add.

First appeal

An appeal against an order of the adjudicating authority lies to the Appellate Authority under Section 107, in Form GST APL-01.

• Time limit: three months from the date the order is communicated. The Appellate Authority may condone a further one month on sufficient cause, and no more.
• Pre-deposit: ten per cent of the tax in dispute, subject to a ceiling of ₹20 crore, in addition to the amount admitted in full.
• Recovery is stayed automatically once the pre-deposit is made. No separate stay application is needed — this follows from the statute, and businesses frequently do not realise it.

Practical points on first appeal

Two practical points recur. The date of communication, not the date on the order, starts the limitation period — and proving it sometimes matters. And an appeal is properly filed only when it is complete: a defective filing is not cured by having been submitted within time.

Appeal to the GST Appellate Tribunal

The Tribunal is now functioning. It was launched in September 2025 and commenced hearing cases on 16 February 2026, with a Principal Bench in New Delhi and state benches. Appeals are filed electronically on the Tribunal's own portal in Form GST APL-05.

• A second appeal lies only against an order of the Appellate Authority or the Revisional Authority. The first appeal cannot be skipped, and an appeal must be directed against the appellate order rather than against the original adjudication order.
• Time limit: three months from communication of the appellate order, with power to condone up to three further months on sufficient cause.
• Pre-deposit: a further ten per cent of the disputed tax, taking the total across both stages to twenty per cent.
• Recovery is again stayed on payment of the pre-deposit.
• Filing is complete only when the final acknowledgement is issued. A provisional acknowledgement is not enough, and a defect discovered after the limitation period has run cannot always be cured.

Transitional position for older orders

Transitional position for older orders. For appellate orders communicated before 1 April 2026, a cut-off of 30 June 2026 was set so that limitation would not expire while the Tribunal was still being constituted. That date has now passed. Where such an order exists and no appeal was filed, the only remaining route is condonation of delay, which the Tribunal may grant for up to three months on sufficient cause — a discretionary remedy, not an entitlement.

If you are holding a first appellate order communicated before April 2026 on which no second appeal was filed, the position should be assessed now rather than later. The window is closing and it does not reopen.

Refund of pre-deposit. Where an appeal succeeds, the pre-deposit is refundable with interest — but the refund is not automatic. It must be claimed, and where a deposit has been held through years of pendency the interest is material. It is also very commonly forgotten.

What we see most often in Raipur

Input tax credit disputes in the steel and scrap trade. Credit denied because a supplier did not file, or because the department questions the genuineness of a transaction. These matters turn on documentation — transport records, weighbridge slips, payment trails — and on establishing that the recipient did what the law requires of a recipient.

Reconciliation demands on traders. Differences between returns, the annual return and the credit statement, often across several years, arising from the department's data matching rather than from any deliberate act.

Works contract classification. Contractors facing demands on the rate applied or on the valuation of a composite supply.

Reverse charge and freight. Disputes over liability on goods transport, and on purchases from unregistered suppliers — including on metal scrap, where the obligations changed in October 2024 and many businesses adjusted late.

Registration cancellations. Usually for non-filing, and usually urgent, because the commercial consequences for the business's customers arrive immediately.

Old-year demands. Proceedings for the earlier years of GST, where records have to be reconstructed and where the limitation and the provision invoked are frequently the strongest grounds.

Scope of our work

We review the notice and establish what is actually being alleged and under which provision; assemble the reconciliations and documents the reply requires; draft and file the reply and represent the client before the adjudicating authority; advise on whether to pay, contest or partly settle, with the penalty consequences of each set out; compute pre-deposit and file first appeals in Form APL-01; prepare and file appeals before the Tribunal in Form APL-05, including assessing limitation and the prospects of condonation where a deadline has passed; apply for revocation of cancelled registrations and regularise the underlying filings; and claim refund of pre-deposit with interest where an appeal succeeds.

Where a matter is better settled than contested, we say so, with the numbers.