MONETARY LIMIT FOR FILING APPEAL BEFORE TRIBUNAL, HIGH COURT AND SUPREME COURT BY DEPARTMENT IN GST MATTERS

[Mr. M. GOVINDARAJAN]

Appeal before First Appellate Authority

Section 107 of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) provides for filing appeal before the First Appellate Authority by the taxable person.  Section 107(2) provides for filing appeal before the First Appellate Authority by the Department.  The said section provides that the Commissioner may, on his own motion, or upon request from the Commissioner of State tax or the Commissioner of Union territory tax, call for and examine the record of any proceedings in which an adjudicating authority has passed any decision or order under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the Appellate Authority within 6 months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order.  The authorized officer shall make an application to the Appellate Authority, such application shall be dealt with by the Appellate Authority as if it were an appeal made against the decision or order of the adjudicating authority and such authorized officer were an appellant and the provisions of this Act relating to appeals shall apply to such application.

Appeal before GST Tribunal

Section 112 (2) of the Act provides for filing appeal GST Tribunal by the Department.  The said section provides that  the Commissioner may, on his own motion, or upon request from the Commissioner may, on his own motion, or upon request from the Commissioner of State tax or Commissioner of Union territory tax, call for and examine the record of any order passed by the Appellate Authority or the Revisional Authority under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act for the purpose of satisfying himself as to the legality or propriety of the said order and may, by order, direct any officer subordinate to him to apply to the Appellate Tribunal within 6 months from the date on which the said order has been passed for determination of such points arising out of the said order as may be specified by the Commissioner in his order.  Such  authorized officer makes an application to the Appellate Tribunal, such application shall be dealt with by the Appellate Tribunal as if it were an appeal made against the order under  section 107 (11) or  section 108 (1) and the provisions of this Act shall apply to such application, as they apply in relation to appeals filed under this section. 

Appeal before High Court

Section 117 (1) of the ‘Act provides that any person (including Department) aggrieved by any order passed by the State Benches of the Appellate Tribunal may file an appeal to the High Court and the High Court may admit such appeal, if it is satisfied that the case involves a substantial question of law.

Appeal before Supreme Court

Section 118 provides that if the Department is aggrieved against any order passed by the High Court or principal Bench of the Tribunal,  it may file appeal before the Supreme Court against the order of the High Court. 

Monetary limitation

Section 120 (1) of the Act provides that the Board may, on the recommendations of the Council, from time to time, issue orders or instructions or directions fixing such monetary limits, as it may deem fit, for the purposes of regulating the filing of appeal or application by the officer of the central tax

Accordingly, the Board, vide its circular No. 207/1/2024 – GST, dated 26.06.2024

fixed monetary limits for filing appeal by the Department before GST Tribunal, High Court and Supreme Court to reduce litigation. The Board, on the recommendations of the GST Council, fixes the following monetary limits below which appeal or application or Special Leave Petition, as the case may be, shall not be filed by the Central Tax officers before Goods and Service Tax Appellate Tribunal (GSTAT), High Court and Supreme Court under the provisions of CGST Act, subject to the exclusions mentioned-

• Before GST Appellate Tribunal – monetary limit Rs.20 lakhs;
• Before High Court – monetary limit – Rs.1 crore;
• Before Supreme Court – monetary limit Rs. 2 crore.

The circular further provides that while determining the monetary limit the following shall be considered-

• Where the dispute pertains to-

• demand of tax (with or without penalty and/or interest), the aggregate of the amount of tax in dispute (including CGST, SGST/UTGST, IGST and Compensation Cess) only shall be considered;
• demand of interest only, the amount of interest shall be considered;
• imposition of penalty only, the amount of penalty shall be considered;
• imposition of late fee only, the amount of late fee shall be considered;
• erroneous refund, the amount of refund in dispute (including CGST, SGST/UTGST, IGST and Compensation Cess) shall be considered.

• Monetary limit shall be applied on the disputed amount of tax/interest/penalty/late fee in respect of which appeal or application is contemplated to be filed in a case.
• In a composite order which disposes more than one appeal/demand notice, the monetary limits shall be applicable on the total amount of tax/interest/penalty/late fee, and not on the amount involved in individual appeal or demand notice.

Exclusions

While calculating the monetary limit the following shall be excluded-

• Where any provision of the Acts has been held to be ultra vires to the Constitution of India; or
• Where any Rules or regulations made under Acts have been held to be ultra vires the parent Act;
• Where any order, notification, instruction, or circular issued by the Government or the Board has been held to be ultra vires of the Act or the Rules made there under; or
• Where the matter is related to valuation of goods or services or classification of goods or services or refunds or place of supply or any other issue which is recurring in nature and/or involves interpretation of the provisions of the Act /the Rules/ notification/circular/order/instruction etc., or
• Where strictures/adverse comments have been passed and/or cost has been imposed against the Government/Department or their officers; or
• Any other case or class of cases, where in the opinion of the Board, it is necessary to contest in the interest of justice or revenue.

Other points

In case the value exceeds the monetary limitation, such cases are to be decided on merit and shall keep in mind the overall objective of reducing unnecessary litigation and providing certainty to taxpayers on their tax assessment while taking a decision regarding filing an appeal.

The Reviewing Authorities shall specifically record that “even though the decision is not acceptable, appeal is not being filed as the amount involved is less than the monetary limit fixed by the Board.  Non-filing of appeal based on the above monetary limits, shall not preclude the tax officer from filing appeal or application in any other case involving the same or similar issues in which the tax in dispute exceeds the monetary limit or case involving the questions of law.

Where no appeal is filed based on the monetary limit, the Departmental representatives/counsels must make every effort to bring to the notice of the GSTAT or the Court, as the case may be, that the appeal in such cases was not filed only for the reason of the amount of the tax in dispute being less than the specified monetary limit and, therefore, no inference shall be drawn that the decisions rendered therein were acceptable to the Department. Accordingly, they should draw the attention of the GSTAT or the Court.

Conclusion

The monetary limit has also fixed in respect of the income tax matters.  Though 7 years have been lapsed from the implementation of GST no GST Tribunal has been established.  The taxable persons are to approach the High Court by means of writ petitions since the GST Tribunal has not been established.  The circular will be most effectful only after the constitution of GST Tribunals all over India.