Decided 6 October 2026. The Bengaluru Bench of GSTAT has set aside an order dismissing a first appeal without a hearing on grounds of delay, the signatory's authority and non-payment of an 'admitted' amount. It condoned the 21-day delay and held no pre-deposit was due on an interest-only order. On merits, it upheld interest on differential tax paid late after the works contract rate for Government entities rose from 12% to 18% on 01.01.2022, but reduced the GSTR-3B interest.
Case at a glance
| Case | M/s Groma Infrastructure Limited (formerly MVPR Infrastructure Ltd), Raichur v. Commissioner of Commercial Taxes, Karnataka |
| Forum | GSTAT, Bengaluru Bench, Division Bench Court No. 3 |
| Appeal No. | APL/143/BUR/2026 |
| Date of order | 6 October 2026 |
| Period | FY 2021-22 |
| Final demand | Interest of Rs 43,94,495 (no tax or penalty) |
| Result | Appeal partly allowed |
Facts of the case
The appellant executes works contracts for Government undertakings. From 01.01.2022, the rate for works contracts supplied to Government entities rose from 12% to 18%. It billed at 12% for January to March 2022 and paid the differential of Rs 1,32,90,600 each under CGST and SGST through DRC-03 between October 2022 and June 2023.
The section 73 order confirmed interest of Rs 21,96,829 each under CGST and SGST on the differential, plus GSTR-3B interest of Rs 27,841 (CGST) and Rs 25,490 (SGST). The first appeal, filed 21 days late with a condonation petition, was dismissed on 19.02.2026 without a hearing.
Issue before the Tribunal
Could the first appeal be dismissed without hearing, and is interest payable on differential tax paid late after the rate change?
What the Tribunal held
- Section 107(8) requires a hearing before deciding an appeal, even on threshold objections such as limitation or authority (Binapani Dei; Maneka Gandhi).
- A condonation petition was on record; no affidavit is required. The short, explained delay of 21 days was condoned (Katiji; N. Balakrishnan).
- The General Manager held a notarised power of attorney; any defect in proof of authority is curable and the company ratified the appeal (United Bank of India v. Naresh Kumar).
- A computation offered 'even assuming' liability is not an admission (Nagindas Ramdas). With no tax confirmed, no 10% pre-deposit was due; the penalty-only pre-deposit proviso from 01.10.2025 did not apply.
- On merits, interest under section 50 is compensatory and follows late payment. The customer's non-payment, retention money and hardship do not postpone the time of supply, and Rule 35 does not apply where tax was charged separately. GSTR-3B interest was cut to Rs 418 (CGST) and Rs 419 (SGST) after credit for interest already paid.
Practical takeaways for taxpayers
- Contractors billing Government entities must apply rate changes from their effective date; late differential payments attract interest even if the customer has not paid.
- If a first appeal is dismissed unheard on technical grounds, GSTAT can restore it and even decide the merits.
- Phrase alternative computations clearly as 'without prejudice' so they are not treated as admissions.
Frequently asked questions
Is a pre-deposit needed when the order demands only interest?
GSTAT held no 10% pre-deposit is required under section 107(6)(b) where no tax is confirmed.
Can interest be avoided because the Government customer did not pay the rate increase?
No. The Tribunal held the customer's non-payment does not affect the supplier's liability to pay tax and interest on time.
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This summary is based on the order of the GST Appellate Tribunal, Bengaluru Bench (Division Bench Court No. 3) in Appeal No. APL/143/BUR/2026. It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.