Madras High Court: Voluntary Payment in Form GST DRC-03 to be Treated as Pre-Deposit for Appeals!

 

In a landmark ruling, the Madras High Court has provided relief to taxpayers by holding that voluntary payments made through Form GST DRC-03 will be treated as pre-deposit for appeals under Section 107 or Section 112 of the CGST Act, even if not paid through Form GST DRC-03A.

Let us have a Short Overview of the case:

Case Details:
Case: AR FOUNDATIONS PVT LTD Vs APPELLATE DEPUTY COMMISSIONER ST
Court: Madras High Court
Judgment Date: February 6, 2025

Key Facts:
The petitioner filed an appeal against an order-in-original dated 26.07.2024 but it was rejected for non-payment of pre-deposit through Form GST DRC-03A.
Due to portal issues, the petitioner had voluntarily paid ₹5,02,780/- (10% of the disputed tax) through Form GST DRC-03.
The tax authorities rejected the appeal, assuming the payment was for another purpose.

Court’s Ruling:
The Madras High Court ruled in favor of the petitioner, providing the following directives:
1 The rejection order dated 26.07.2024 was set aside.
2 The Court directed the tax authorities to restore the appeal and take it on record.
3 The amount paid by the petitioner through Form GST DRC-03 was directed to be treated as a valid pre-deposit for filing the appeal.
4 The Court instructed the tax authorities to verify any discrepancies in the payment and report them, if found.

The Copy Of the order is as under:

AR_Foundations_Private_Limited