APPELLATE & REVISIONAL AUTHORITIES IN GST

[Dr. Sanjiv Agarwal]

Appellate Authority

Section 2(8) defines appellate authority as follows:

“Appellate Authority” means an authority appointed or authorised to hear appeals as referred to in section 107.

Like in any tax law, taxation laws in relation to Goods and Service Tax also provides for appellate provisions to enable the aggrieved person to make an appeal against any order or decision by which such person is aggrieved.

Tax laws (or any law, for that matter) impose obligations. Such obligations are broadly of two kinds: tax-related and procedure-related. The taxpayer’s compliance with these obligations is verified by the tax officer (by various instruments such as scrutiny, audit, anti-evasion, etc.), as a result of which, sometimes there are situations of actual or perceived non-compliance. If the difference in views persists, it results into a dispute, which is then required to be resolved.

Tax law recognizes that on any given set of facts and laws, there can be different opinions or viewpoints. Hence, it is likely that the taxpayer may not agree with the “adjudication order” so passed by the tax officer. It is equally possible that the Department may itself not be in agreement with the adjudication order in some cases. It is for this reason that the statute provides further channels of appeal, to both sides.

However, since the right to appeal is a statutory right, the statute also places reasonable fetters on the exercise of that right. The time limits prescribed by the statute for filing of appeals and the requirement of pre-deposit of a certain sum before the appeal can be heard by the competent authority are examples of such fetters on the statutory right.

GST implemented in India is a dual GST i.e. to say every supply attracting the levy will be leviable to both Central tax and State tax. So does this mean that if a taxpayer is aggrieved by any such transaction, he will have to approach both the authorities for exercising his right of appeal? The answer is a plain NO. The Act makes provisions for cross empowerment between CGST and SGST/UTGST officers so as to ensure that if a proper officer of one Act (say CGST) passes an order with respect to a transaction, he will also act as the proper officer of SGST for the same transaction and issue the order with respect to the CGST as well as the SGST/UTGST component of the same transaction. The Act also provides that where a proper officer under one Act (say CGST) has passed an order, any appeal/review/revision/rectification against the said order will lie only with the proper officers of that Act only (GST Act). So also if any order is passed by the proper officer of SGST, any appeal/review/revision/rectification will lie with the proper officer of SGST only.

Appellate Authority has been defined to means:

1. 1. Any authority duly appointed or authorized
   2. Such authority should be authorized to hear the appeals
   3. Such appeals should be as referred to in section 107 of CGST Act, 2017

The appellate authority in terms of section 2(8) and 107 of CGST Act, 2017 shall carry out the following functions/obligations:

1. To receive the appeal
2. To hear and adjudicate the dispute and issues under the appeal
3. To condone the delay in terms of statutory provisions
4. To give an opportunity to the appellant of being heard
5. To allow adjournments on a reasonable cause being shown
6. To issue show cause notice where he is of opinion that tax has not been paid or short paid or refund/ input tax credit is wrongly taken.
7. To decide the appeal to the extent possible within a period of one year of filing of appeal
8. To issue the appellate order with copies to all concerns including summary of order as required under the relevant rules.

It may further be noted that the Appellate Authority (AA) has to follow the principles of natural justice – such as hearing the appellant, allowing reasonable adjournments (not more than 3), permitting additional grounds (if found reasonable), etc. The AA can also make such further inquiry as may be necessary. On conclusion of the appeal process, the AA will pass his order (Order-in-Appeal) which may confirm, modify or annul the decision or order appealed against but shall not refer the case back to the authority that passed the said decision or order. The AA can also increase the “rigour” of the order appealed against by enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit, but this can only be done after the AA has given to the appellant a reasonable opportunity of showing cause against the proposed order. Further, if the AA is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilized, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under section 73 or Section 74 of the CGST Act, 2017. The Order-in-appeal has to be a “speaking order” i.e. it should state the points for determination, the decision thereon and the reasons for the decision. The law provides an advisory time limit of 1 year from date of filing of appeal for the AA to decide the appeal.

In M/S. RADIANT ENTERPRISES PRIVATE LIMITED AND ANR. VERSUS JOINT COMMISSIONER, CGST & CX (APPEAL I) & ORS. [2023 (2) TMI 37 - CALCUTTA HIGH COURT], on the question of power of Appellate Authority, it was held that GST Act does not provide for filing cross appeals by Department in statutory appeal filed before Appellate Authority. Appellate Authority cannot give a decision on issue which did not emanate from order passed by original authority.

Revisional Authority

Section 2(99) defines revisional authority as follows:

“Revisional Authority” means an authority appointed or authorised for revision of decision or orders as referred to in section 108;

As per section 2(99) of the CGST Act, 2017, ‘Revisional Authority’ means an authority appointed or authorised for revision of decision or orders as referred to in section 108. It contains provisions in relating to powers of revisionary authority and how it has to act and order for revision.

Under section 108 of the CGST Act, 2017, the Commissioner has been given revisionary powers. He can stay the operation of the order for such period as he deems fit and also make further inquiry for passing a revised order.

The Commissioner may on his own motion or upon information received by him, call for and examine the record of any proceeding under this Act, and if he considers that any decision or order passed under this Act by any officer subordinate to him is erroneous in so far as it is prejudicial to the interest of the revenue, he may, if necessary, stay the operation of such decision or order for such period as he deems fit and after giving the person concerned an opportunity of being heard and after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, including enhancing or modifying or annulling the said decision or order.

For this purpose, ‘record’ shall include all records relating to any proceedings under this Act available at the time of examination by the commissioner.

It may be noted that ‘decision’ shall include intimation given by any officer who is sub-ordinate to commissioner or lower in rank than the revisional authority which implies that review by commissioner could be of any show cause notice or any other communication.