Md Qamaruddin Khan vs SRI UMAMAHESHWARA INFRATECH

GSTAT

State Bench Hyderabad
Court No. Court II
APL/14/HYD/2026
MD QAMARUDDIN KHAN .............Appellant
Versus
SRI UMAMAHESHWARA INFRATECH, PARTNER, PLOT NO
260 2ND FLOOR SRINIVASAPURAM COLONY
HASTHINAPURAM SOUTH SAROORNAGAR HYDERABAD
TGRAN 500070 .............Respondent

Quorum
Hon’ble A P Ravi, Member(Judicial)
Hon’ble Duvvuri Krishna Srinivas, Member (Technical)
Counsel for Appellant
SHRI K. SAI PRASAD, SUPERINTENDENT,
HYDERABAD GST AND SHRI RAM SUBBA
REDDY
Counsel for Respondent
NONE
NONE
Form GST APL-04A
[See rules 113(1) & 115]
Summary of the order and demand after issue of order by the GST Appellate Tribunal
whether remand order : No
Order reference no. : ZN560361126000140H Date of order : 06/11/2026
1. GSTIN/Temporary ID/UIN -
2. Appeal Case Reference no. - APL/14/HYD/2026 Date - 23/03/2026
Name of the appellant - Md Qamaruddin Khan , [email protected] ,
3.
8587964374
Name of the respondant -
1. SRI UMAMAHESHWARA INFRATECH , [email protected] ,
9966639999
4.

5. Order appealed against -
(5.1) Order Type - Registration Order
(5.2) Ref Number - ZD3607240803672 Date - 31/08/2021
Personal Hearing - 06/11/2026 14/10/2026 08/10/2026 10/09/2026 23/07/2026
6.
02/07/2026 25/06/2026
7. Status of Order under Appeal - Modified – Order under Appeal is modified
Order in brief - The First Appellate Authority had directed the Respondent - Tax payer
to pay the interest while revoking the cancellation of their registration and allowing the
appeal. The Respondent-taxpayer had paid the tax as directed, however, failed pay
interest, late fee and penalty as stipulated under Proviso to Rule 23 (1) of the CGST /
SGST Rules, 2017. After hearing the arguments put forth, the Bench had allowed the
department’s appeal and directed the Respondent-Taxpayers to pay appropriate interest
and late fee. The Bench has also imposed the penalty of Rs.10,000/- for the said
violation. The FAA order is modified to this extent and appeal of the Department
allowed.
8.
Summary of Order
9. If demand order then whether demand quantified: Yes
Section-I
Particulars Central tax State/UT tax Integrated tax Cess Total
Disputed

Amount
Determined
Amount
Disputed
Amount
Determined
Amount
Disputed
Amount
Determined
Amount
Disputed
Amount
Determined
Amount
Disputed
Amount
Determined
Amount
1 2 3 4 5 6 7 8 9 10 11
(a) Tax 0 0 0 0 0 0 0 0 0 0
(b)
0 0 0 0 0 0 0 0 0 0
Interest
(c) Penalty 0 5000 0 5000 0 0 0 0 0 10000

0 0 0 0 0 0 0 0 0 0
(d) Fees

(e) Others 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
(f) Refund
10. For Other orders and Demand orders which are not quantified:
Order by
GST
Appellate
Tribunal
Issues as
raised by
proper officer
Issues as determined by Appellate/Revisional authority
The taxpayer contended that returns could not be filed due to
financial difficulties and COVID-19 impact. It was submitted
that returns were subsequently filed along with payment of
tax and that the cancellation of registration has adversely
affected business operations.
Revocation of
registration


ORDER
Date of Hearing: 14.10.2026
Date of Pronouncement: 06/11/2026

FINAL ORDER No. 27/COURT-II/HYD/2026

JUDGEMENT:

Per: A P Ravi, Judicial Member
1. The Department has preferred the present appeal against the order
passed by the First Appellate Authority in Order-in-Appeal No.
st
HYD-GST-RRC-AAP1-046-21-22 dated 31 August, 2021. The appeal is filed
under Section 112(3) of the Central Goods and Services Tax Act, 2017
(hereinafter referred to as the “Central Act”), read with Section 112(4) thereof.
For brevity and convenience, any reference to the “Act” or the “Central Act”
shall, unless the context otherwise requires, be understood to include the
State Goods and Services Tax Act, 2017 (hereinafter the “State Act”), the

provisions of which correspond with and are intended to operate concurrently
with those of the Central Act.
2. The Appellant–Department (hereinafter referred to as “the Appellant”),
being aggrieved by the order impugned herein, has preferred the present
appeal. The principal contention of the Appellant is that the FAA, while
passing each of the impugned orders, had erred in allowing the appeal solely
on the basis of verification of payment of taxes and filing of returns without
payment of interest, penalty and late fee in respect of the said returns. It is
the submission of the Appellant that the FAA ought not to have allowed the
appeal without ensuring that interest, penalty and late fee, as applicable, has
been paid. Instead, the FAA had only pressed upon the verification of
payment of taxes and filing of the returns. The Appellants have therefore
contended that the order impugned in not legal and proper and that it has
been prayed that this Tribunal may, after taking into consideration their
submissions, pass such orders and or other orders as may be deemed fit.
3. The Respondent, engaged in the business of Infrastructure
Development, being registered with the GST department had defaulted in
submitting their GSTR-3B returns for a continuous period of SIX months and
consequently a show cause notice proposing to cancel their registration was
issued on 09.01.2020. After due process, the Adjudicating Authority (AA) had
vide Order No. ZA360820021479I dated 16.08.2020, cancelled the
registration with effect from 16.08.2020. Upon filing of appeal, the FAA had
considered the fact that the respondent had immediately on issue of the said
show cause notice had filed all their returns and that, based on the
submissions made, found it appropriate to allow the appeal. However, the
FAA, while allowing the appeal and revoking the cancellation, had exercised
caution and directed the proper officer to verify the correctness of the claim

of the respondent herein that the returns had been filed and taxes paid for
the relevant period.
4. The appellant herein contends that the FAA had not considered the
requirements of Rule 23(1) of the Central Goods & Services Tax Rules, 2017
(the Rules) and the proviso to the said rule. It is their grievance that the FAA
ought to have ensured that not only the taxes is paid, but also should have
considered the payment of interest, late fee and penalty. To this extent, the
Appellants are of the view that the order impugned is not legal and proper and
consequently it is prayed, as in their DRC-07 submitted, that the impugned
order be set aside and restore the cancellation order passed by the Proper
Officer.
5. The Learned Department Representative (DR) Shri. Sai Prasad,
appearing on behalf of the Appellants submits that the respondents have not
paid the appropriate interest, late fee and penalty as contemplated under
proviso to Rule 23(1) of the Rules and that order impugned is bad in law and
hence merits to be set aside.
6. None had represented for the respondents. Despite being afforded more
than three separate opportunities to appear and be heard, the respondents
failed to mark their presence and did not file any cross-objections or tender
any material in their defence. In the circumstances, and applying the maxim
audi alteram partem which presupposes a chance to be heard but does not
oblige the Tribunal to wait indefinitely for dilatory conduct, this Tribunal is
obliged to proceed. Having given the respondents adequate opportunity, their
persistent non-appearance and failure to place any material before the
Tribunal disentitles them to any procedural advantage; accordingly, ex debito
justitiae , -reason of duty of justice- the appeal shall be decided on its merits

on the basis of the record and the documents produced by the
Appellant-Department.
7. The short matter to be decided in the instant appeal is whether the FAA
was within his powers to allow the appeal filed by the Respondent herein,
without ensuring or causing verification that the interest, late fee and penalty
are paid by them along with the taxes for the relevant period?
8. Heard Ld. DR and also noted the arguments advanced by him as well
as their grounds of the appeal and other documents filed by them.

9. The crux of the issue is to decide whether the FAA had exceeded his
jurisdiction in not acting within the parameters of Rule 23 of the Rules and
restored the registration without causing any proper verification. Before we
proceed to decide the issue, it is imperative to note the provisions of Rule 23(1)
of the Rules. The relevant portion of the said rule is reproduced below for
ease of reference:
Rule 23. Revocation of cancellation of registration. -

(1) A registered person, whose registration is cancelled by the proper
officer on his own motion, may 1 [subject to the provisions of rule 10B]
submit an application for revocation of cancellation of registration, in
FORM GST REG-21 , to such proper officer, within a period of thirty days
from the date of the service of the order of cancellation of registration 2
[or within such time period as extended by the Additional Commissioner
or the Joint Commissioner or the Commissioner, as the case may be, in
exercise of the powers provided under the proviso to sub-section (1) of
section 30 ,] at the common portal, either directly or through a Facilitation
Centre notified by the Commissioner:

Provided that no application for revocation shall be filed, if the
registration has been cancelled for the failure of the registered person to
furnish returns, unless such returns are furnished and any amount due
as tax, in terms of such returns, has been paid along with any amount

payable towards interest, penalty and late fee in respect of the said
returns:

Provided further that all returns due for the period from the date of the
order of cancellation of registration till the date of the order of revocation
of cancellation of registration shall be furnished by the said person within
a period of thirty days from the date of order of revocation of cancellation
of registration:

Provided also that where the registration has been cancelled with
retrospective effect, the registered person shall furnish all returns relating
to period from the effective date of cancellation of registration till the date
of order of revocation of cancellation of registration within a period of
thirty days from the date of order of revocation of cancellation of
registration].
10. For the record, the liability arising from the returns under consideration
is not confined to the principal tax alone but expressly extends to interest,
late fee and penalty. These ancillary components constitute substantive
obligations flowing from the statutory and regulatory scheme governing return
filing and tax payment, and are therefore integral to the correct adjudication
of any dispute about the returns.
10.1 The First Appellate Authority, however, approached the appeals solely
on the basis of verification of tax payment and filing of returns, without any
discernible consideration of the proviso to Rule 23(1) of the Rules or of the
statutory provisions which mandate assessment and recovery of interest, late
fee and penalty. The omission is not a mere oversight of a procedural nicety:
it goes to the root of the substantive liability and the completeness of the
adjudicatory exercise.
10.2 By failing to advert to and apply the proviso to Rule 23(1) and the
attendant statutory provisions, the FAA exceeded its jurisdiction and
committed both a jurisdictional and substantive error. The impugned order is

therefore vitiated by illegality and incompleteness, inasmuch as it fails to
determine or preserve the State’s claim to recover interest, late fee and penalty
which remain live and enforceable liabilities.
11. Be that as it may, where the amounts claimed are effectively admitted
by the respondents, the Appellant was obliged to pursue recovery by resort to
the statutory machinery provided under Section 79 of the Act. Interest, late
fee and penalty, once shown to be due and owing, are enforceable public dues;
the statutory scheme accordingly vests the Appellant with specific powers to
recover such sums administratively and compulsorily.

11.1 Section 79 supplies the appropriate and exclusive mechanism for
recovery of admitted tax arrears and ancillary sums, and must be invoked
and exhausted before this Tribunal is asked to exercise its discretionary
jurisdiction in aid of collection. Failure to invoke that remedy, and instead to
seek relief in this Forum, is inconsistent with the orderly operation of the
recovery regime and risks circumvention of the statutory process.
11.2 The Appellant has contended that the FAA ought to have ensured that
the respondent shall, apart from tax, pay interest, late fee and penalty, as
contemplated under Rule 23 of the Rules. We observe that the FAA had, while
allowing the appeal filed under Section 107 of the Act, had clearly directed
the proper officer to cause necessary verification of payment of tax and filing
of returns. The only provision that envisages such a requirement is the
provisions of Rule 23 and therefore, the Appellants have sought for interest,
late fee and penalty. We are of the considered opinion that the intent of the
FAA from the language adopted in the order impugned appears, though has
not directly referred Rule 23 of the Rules, that the amounts as indicated in
Rule 23 of the Rules are to be collected. While the Respondent had admittedly
paid the tax alone and filed the returns, the Appellants were at the liberty to

collect the interest and late-fee as per existing provisions i.e. Section 50 and
Section 47 of Act, respectively. Further as provided in Rule 23 the respondent
is liable in addition to the above, for penalty. Accordingly, we deem it
appropriate to impose a penalty of ₹ 10,000/- under Rule 23 of the Rules.
12. In view of the foregoing discussion, we hold that the FAA had erred in
ignoring the provisions of Rule 23(1) of the Rules, which necessitates that
interest, penalty and late fee also be paid consequent to the payment of
admitted tax liabilities. Therefore, the order impugned is held to be modified
to that extent.

13. The issue framed in paragraph 7 above is answered accordingly.
14. On the above terms, the appeal is disposed of.
15. No order as to costs.
(The order pronounced in the open court today in the presence of DR)
Digitally signed by
A P RAVI
06-11-2026 17:59:58 IST

(A P Ravi)
Judicial Member



(Duvvuri Krishna Srinivas)
Technical Member (Center)
Dated: 06.11.2026