REVISION OF ORDER IN GST LAW

[Dr. Sanjiv Agarwal]

The GST Act provides for the mechanism of revision, by the Revisional Authority, of the orders passed by his subordinate officers. If the Revisional Authority on examination of the case records is of the view that the decision or order passed by any officer subordinate to him is erroneous in so far as it is prejudicial to the interest of the revenue, and is illegal or improper or has not taken into account material facts, 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.

It may be noted that ‘decisions’ shall include intimation given by any officer lower in rank than the Revisional Authority.

It may be noted that all the orders or decisions are not subject to revision mechanism. The revision shall not be applicable to all non-appealable orders and decisions which cannot be revised. The non-appealable orders are dealt with in section 121 of CGST Act, 2017 and section 108 is subject to the provisions of section 121 of CGST Act, 2017.

Power of Revision

This section contains provisions in relating to powers of revisionary authority and how it has to act and order for revision.

Under section 108 of 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.

‘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.

In terms of section 108(2) of the CGST Act, 2017, the Commissioner shall not exercise any power under sub-section (1), if—

     (a)   the order has been subject to an appeal under section 112 or under section 107 or under section 117 or under section 118; or

     (b)   more than three years have expired after the passing of the decision or order sought to be revised.

Where the issuance of an order under sub-section (1) is stayed by the order of a court or tribunal, the period of such stay shall be excluded in computing the period of three years.

Appeal could be before Appellate Authority, Tribunal, High Court or Supreme Court. It would therefore, be desirable to file appeal at an early date if revision is feared by the tax payer.

Further, it may be noted that as per proviso to section 108(2), if any point is not covered in appeal, commissioner can exercise power of revision in respect of such points or issues. However, this can be done within the following time frame-

• within one year from the date of order in appeal, or
• within 3 years from passing of the decision/order sought to be revised, whichever is later.

Nature of Revision Order

As per section 108(3) of the CGST Act, 2017, appeal against order or revision by the Commissioner is subject to appeal provisions under section 113, 117 or 118 of the CGST Act, 2017, i.e. before Appellate Tribunal, High Court and Supreme Court.

Thus, every order passed under section 108(1), shall be final and binding on the parties but subject to appeal before higher forums

Thus, if an appeal is preferred against the revision order, it may be done before the following authorities:

1. Appellate Tribunal (Section 113)
2. High Court (Section 117)
3. Supreme Court (Section 118)

If no appeal as aforesaid is preferred, order passed under section 108(1) of CGST Act, 2017 shall be considered as final and binding on the concerned parties.

How to reckon limitation period of three years?

As per section 108(5) of the CGST Act, 2017, if the decision or order passed under this Act by an officer subordinate to the commissioner involves an issue on which the appellate tribunal or the high court has given its decision which is prejudicial to the interest of revenue in some other proceedings and an appeal to the high court or the Supreme Court against such decision of the appellate tribunal or as the case may be, the high court is pending, the period spent between the date of the decision of the appellate tribunal and the date of the decision of the high court or as the case may be, the date of the decision of the high court and the date of the decision of the Supreme Court shall be excluded in computing the period of three years.

Non-applicability of Revision Mechanism

Since the provisions of section 108 are subject to application of section 121 which provides for non-appealable decisions and orders, viz., the following orders:

1. an order of the Commissioner or other authority empowered to direct transfer of proceedings from one officer to another officer; or
2. an order pertaining to the seizure or retention of books of account, register and other documents; or
3. an order sanctioning prosecution under this Act; or
4. an order passed under section 80.

the revision cannot be resorted to. It may further be noted that the power of revision cannot be exercised if:—

1. the order has been subject to an appeal before AA or Tribunal or High Court or Supreme Court; or
2. the period of six months (from the date of communication of order) has not yet expired or more than three years have expired after the passing of the decision or order sought to be revised; or
3. the order has already been taken for revision at an earlier stage; or
4. the order sought to be revised is a revisional order in the first place.

However, the Revisional Authority may pass an order on any point which has not been raised and decided in an appeal before AA/Tribunal/HC/SC, before the expiry of a period of one year from the date of the order in such appeal or before the expiry of a period of three years from the date of initial order, whichever is later.

Quasi-judicial proceedings

Power of revision under section 108 are quasi-judicial and hence principles of natural justice have to be followed and personal hearing is a must. Revisionary orders are not binding on Appellate Tribunal, as it is a quasi-judicial authority.

No revision if already appealed

The powers of Revisional Authority shall not be exercised if an appeal is already filed against the order to any one of the following:

• Appellate Authority under section 107
• Appellate Tribunal under section 112
• High Court under section 117
• Supreme Court under section 118

 The revision can also not be done if:

• period of 6 months as specified in section 107(2) has not expired or more than 3 years have expired after passing the decision or order
• the order has already been taken under this section for revision at any earlier stage
• revisionary order has already been passed once.

If a revision is sought under section 108 of CGST Act, 2017, the Revisional Authority shall pass the order within one year from the date of order passed in such appeal or within 3 years from the date of such passing the decision or order sought to be revised, whichever is later.

Consequences of Revision

On exercise of revisionary powers, the Revisional Authority may after observing principles of natural justice by giving an opportunity of being heard to the assessee may take any of the following decisions as deemed fit:

1. Stay the order under review
2. Enhancing the demand
3. Modifying the order
4. Annulling the order

Time Limit for revision order

If a revision is sought under section 108 of CGST Act, 2017, the Revisional Authority shall pass the order within one year from the date of order passed in such appeal or within 3 years from the date of such passing the decision or order sought to be revised, whichever is later.

 Consequences of revision

On exercise of revisionary powers, the Revisional Authority may after observing principles of natural justice by giving an opportunity of being heard to the assessee may take any of the following decisions the following decisions as deemed fit:

1. Stay the order under review
2. Enhancing the demand
3. Modifying the order
4. Annulling the order

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