APPEALS AND REVISION UNDER ‘SGST’ LAW

[Mr. M. GOVINDARAJAN]

The Model Goods and Services Tax Act, 2016 (‘Act’ for short) provides separate provisions for filing appeals for CGST and SGST.  There is no provision for filing appeal by the Department for SGST law against the order of adjudicating authority.   Instead of it revisionary power is given to the Commissioner.

Appeal by the assessee

Section 79(1) provides that any person aggrieved by any decision or order passed against him under this Act by an Adjudicating Authority, may file appeal to the prescribed First Appellate Authority.

Section 2(4) defines the term ‘adjudicating authority’ as any authority competent to pass any order or decision under this Act, but does not include the Board, the First Appellate Authority and the Appellate Tribunal.  The Act does not provide the proper officer as adjudicating authority.  This may come in the original Act or rules to be framed for this purpose.

Section 2(45) defines the term ‘First Appellate Authority’ as an authority referred to in Section.  In this case also, the Original Act or Rules is to mention who is the First Appellate Authority.

Limitation

Section 79(2) that every appeal shall be filed within three months from the date on which the decision or order sought to be appealed against is communicated to the person preferring the appeal.  The First Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the limitation period, allow it to be presented within a further period of one month.

Form of Appeal

Section 79(3) provides that every appeal shall be filed in the prescribed form (which will be prescribed by the rules) and shall be verified in the prescribed manner.

Pre deposit

Section 79(4) provides that no appeal shall be filed unless the appellant has deposited-

• in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and
• a sum equal to 10% of the remaining amount in dispute arising from the said order, in relation to which the appeal has been filed.

The Department is having right to apply to the First Appellate Authority for ordering a higher amount of pre deposit, not exceeding 50% of the amount in dispute, in  a case which is considered by the Commissioner of GST to be a ‘serious case’.

Serious case

The explanation to Section 79 defines the term ‘serious case’ as a case involving a disputed tax liability not less than ₹ 25 crores and where the Commissioner of GST is of the opinion, for reasons  to be recorded in writing, that the department has a very good case against the tax payer.

Amount in dispute

The expression ‘amount in dispute’ shall include-

• Amount determined under Section 46 – Assessment of non filers of returns; or
• Amount determined under Section 47 – Assessment of unregistered persons; or
• Amount determined under Section 48 – Summary assessment in certain special cases; or
• Amount determined under Section 51 – Determination of tax not paid or short paid or erroneously refunded;
• Amount payable under the GST Credit Rules;
• Amount of fee levied or penalty imposed.

Procedure

The following is the procedure involved in disposing of the appeal by the First Appellate Authority-

• The First Appellate Authority shall given an opportunity to the appellant of being heard, if the appellant so desires;
• Adjournment – The First Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing.   No such adjournment shall be granted more than three times to a party during hearing of the appeal;
• New ground – The First Appellate Authority may, at the hearing of an appeal, allow an appellant to go into any ground of appeal not specified in the grounds of appeal, if he is satisfied that the omission of that ground from the grounds of appeal was not willful or unreasonable;
• The First Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against;
• An order 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 shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order;
• Where the First Appellate Authority 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 51;
• The order of the First Appellate authority shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision;
• The First Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed.Where the issuance of order is stayed by an order of a Court or Tribunal, the period of such stay shall be excluded in computing the period of one year;
• The order of the First Appellate Authority shall be communicated to the appellant and the Adjudicating Authority;
• A copy of the order passed by the First Appellate Authority shall also be sent to the jurisdictional Commissioner of CGST or the authority designated by him and the jurisdictional Commissioner of SGST or the authority designated by him in this behalf;
• Every order passed by the First Appellate Authority, unless challenged before the higher forum, shall be final.

Non appealable orders

Section 93 provides the list of decisions and orders passed by a GST Officer against which appeal cannot be filed.  The said list is furnished as below-

• An order of the Commissioner or other competent authority for transfer of proceeding from one officer to another officer;
• An order pertaining to the seizure or retention of books of account, register and other documents; or
• An order sanctioning prosecution under the Act; or
• An order passed under Section 55. (Payment of tax in installments)

Revision

Section 80(1) provides that subject to Section 93 and rules made there under, 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 other 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.

Section 80(2) provides that the Commissioner shall not exercise the revisionary powers in the following cases-

• the order has been subject to an appeal under-

• Section 79 (Appeal by assessee before First Appellate Authority); or
• Section 82 (Appeals before Tribunal);or
• Section 87 (Appeal to High Court) ;or
• Section 88 (Appeal to Supreme Court); or

• more than three years expired after the passing of the decision or order sought to be revised.

Section 80(5) provides that if the decision or order passed 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 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 decision of Supreme Court, shall be excluded in computing the period.

Section 80(6) provides that where the issuance of an order 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.

Section 80(3) provides that the Commissioner may pass an order on any point which has not been raised and decided in an appeal 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 whichever is later.

Section 80(4) provides that the every order passed in revision shall, unless challenged before the higher forum, be final.

Appeal by the Tribunal

The appeal against the order of the First Appellate Authority may be filed before the Appellate Tribunal constituted for this purpose.   The Central Government shall, on the recommendation of the GST council constitute a National Goods and Services Tax Appellate Tribunal (‘Tribunal’ for short).  The features of this Tribunal are as follows-

• The Tribunal shall be headed by a National President;
• The Tribunal shall have one branch for each State, which shall be called as the State GST Tribunal;
• Every State GST Tribunal shall be headed by a State President;
• Every State GST Tribunal shall consist of as many members (judicial), Members (Technical – CGST) and Members (Technical – SGST) as may be prescribed, to discharge the duties conferred by this Act;
• The qualifications, eligibility conditions and the manner of selection and appointment of the National President, the State President and the Members shall be as may be prescribed on the recommendations of the Council;

Threshold limit

Section 82(2) provides that the Tribunal shall not entertain an appeal where the tax or input credit involved or the difference in tax or input tax credit involved or the amount of fine, fee or penalty determined by such order is less than ₹ 1 lakh.

Limitation period

Section 82 (3) provides that every appeal shall be filed within three months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal.

Pre deposit

Section 82 (7) provides that no appeal shall be filed unless the appellant has deposited-

• In full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and
• A sum equal to10% of the remaining amount in dispute arising from the said order, in relation to which the appeal has been filed.

Amount in dispute

The expression ‘amount in dispute’ shall include-

• Amount determined under Section 46 – Assessment of non filers of returns; or
• Amount determined under Section 47 – Assessment of unregistered persons; or
• Amount determined under Section 48 – Summary assessment in certain special cases; or
• Amount determined under Section 51 – Determination of tax not paid or short paid or erroneously refunded;
• Amount payable under the GST Credit Rules;
• Amount of fee levied or penalty imposed.

The Department is having the right to apply to the Appellate Tribunal for ordering a higher amount of pre-deposit, not exceeding 50% of the amount in the dispute after taking into account the amount deposited in the first appeal, in a case which is considered by the Commissioner of GST to be a ‘serious case’

Procedure

The following is the procedure involved in the disposal of appeal by the Tribunal-

• Every appeal shall be in the prescribed form and shall be verified in the prescribed manner and shall be accompanied by a prescribed fee.No fee shall be payable on the appeal or a memorandum of cross examination filed by the Department;

• On receipt of notice of appeal, the party against whom the appeal has been preferred may, notwithstanding that he may not have appealed against such an order or part thereof, file, within 45 days of the receipt of notice, a memorandum of cross-objections, verified in the prescribed manner, against any part of the order appealed against and such memorandum shall be disposed of by the Tribunal, as if it were an appeal;
• The Tribunal may admit an appeal or permit the filing of memorandum of cross objections after the expiry of the limitation, if it is satisfied that there was sufficient cause for not making it within that period;
• The Tribunal, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing;
• No adjournment shall be granted more than three times to a party during hearing of the appeal;

• The Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders as it thinks fit, confirming, modifying or annulling the decision or order or may refer the case back to the First Appellate Authority or to the Original Authority, with such directions, as it may think fit, for a fresh adjudication or decision, after taking additional evidence, if necessary;
• The Tribunal shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed;
• The copy of the order shall be send to the First Appellate Authority or to the Original Adjudicating Authority, the appellant, the jurisdictional Commissioner of CGST and the jurisdictional Commissioner of SGST;
• Every order passed by the Tribunal, unless appealed against shall be final.

Rectification of mistake

Section 83(3) provides that in an appeal for rectification of mistake application may be made before the Tribunal accompanying by a prescribed fee before the Tribunal.  The Tribunal may amend any order passed by it so as to rectify any mistake apparent from the record, if such mistake is noticed on its own accord, or is brought to the notice by the Commissioner of GST or the other party to the appeal, within a period of three months from the date of the order.  No amendment having the effect of enhancing an assessment or reducing a refund or input tax credit or otherwise increasing the liability of the other party, shall be made unless the Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard.