GST Litigation

Most GST disputes begin as a notice: a difference between GSTR-1 and GSTR-3B, credit questioned against GSTR-2B, or an audit observation. The outcome depends heavily on the first reply. A short reply that does not reconcile the figures can turn a small difference into a large demand. We represent businesses from the notice reply through adjudication, first appeal and the GST Appellate Tribunal.

What GST litigation covers

• Replies to scrutiny notices (ASMT-10) and audit observations
• Replies to show cause notices for tax not paid, short paid or credit wrongly availed
• Representation in adjudication before the order is passed
• First appeal under section 107
• Appeal to the GST Appellate Tribunal under section 112
• Appeals and writ petitions before the High Court, and the Supreme Court

Each stage has its own forms, pre-deposit and time limit, and missing one can end the remedy whatever the merits.

Demands with and without fraud

• Section 73 (up to FY 2023-24): demands without fraud or suppression, with lower penalties and a shorter time limit.
• Section 74 (up to FY 2023-24): demands alleging fraud, wilful misstatement or suppression, with higher penalties and an extended time limit.
• Section 74A (from FY 2024-25): a single provision for all demands, with the time limit and penalty depending on whether fraud is alleged.

A notice alleging fraud without real evidence of it is a common ground of challenge, since the extended time limit and higher penalty depend on it.

The appeal ladder

The Tribunal began functioning in phases from late 2025, with a principal bench in New Delhi and state benches. Transitional time limits apply for appeals against older first appeal orders.

Replying to a show cause notice

• Identify the provision invoked and whether the fraud-based time limit and penalty can apply
• Check validity: service, time limits and whether the allegation is specific
• Reconcile the actual difference (credit mismatch, unpaid reverse charge, classification) with your records before drafting
• Reply within the time allowed and ask for a personal hearing
• Consider paying undisputed amounts with interest to limit penalties

First appeal

• Filed in Form APL-01 within three months of the order (one more month with sufficient cause)
• Pre-deposit of 10% of the disputed tax, with the admitted amount paid in full
• Statement of facts and grounds answering each finding
• Reconciliations and documents, since the appellate authority reviews both facts and law

The GST Appellate Tribunal

• Appeal in Form APL-05 within three months of the first appeal order, on the Tribunal's e-filing portal
• A further pre-deposit on the remaining disputed tax
• Grounds on law, facts, procedure or jurisdiction
• The Tribunal is the final fact-finding forum; facts settled there generally cannot be reopened in the High Court
• Stricter requirements for paper books and certified copies than at the first appeal, and new facts generally cannot be raised for the first time

High Court and Supreme Court

Appeals to the High Court are limited to substantial questions of law; writ petitions may lie where there is a violation of natural justice or lack of jurisdiction. The Supreme Court hears matters of wider importance or where High Courts differ.

Who needs GST litigation support

• Businesses facing notices on turnover or credit mismatches
• Demands following a departmental audit
• Rejected refund claims, particularly for exporters
• Unfavourable first appeal orders
• Provisional attachment of bank accounts or property under section 83, where urgent representation is needed

Common mistakes

Common questions

Is the pre-deposit compulsory?

Yes, at both appeal stages. Without it, the appeal is not validly filed. Once the pre-deposit is paid, recovery of the balance is stayed.

Can I go directly to the High Court?

Generally not. The statutory appeals should be used first, except in cases of lack of jurisdiction or violation of natural justice.

Who can represent us?

An advocate, chartered accountant, cost accountant or company secretary in practice can represent you before GST authorities and the Tribunal.

Is settling better than appealing?

Sometimes. Amnesty schemes have waived interest and penalty on older demands if the tax is paid and the appeal withdrawn. It depends on the strength of the case.