section 120 of the CGST Act (Appeal not to be filed in certain cases)

[Gnanamuthu samidurai]

Under this section, the Board may issue orders  or instructions or directions fixing such monetary limit for the purpose of regulating the filing of appeals or applications by the officer of the Central Tax.   However, the same can be done only on the basis of recommendations made by the Goods and Services Tax Council “hereinafter called Council” constituted under Articles 279A of the Constitution of India.  Article 368 of the Constitution of India gives power to Parliament  to amend the constitution and the procedure therefor. By invoking the said power under Article 368, the Constitution was amended vide One Hundred and First  Amendment Act 2016  and thereby Article 279A  was inserted and it has come into force with effect from 12^th September 2016.  On that basis  Goods and Services Tax Council was established. Further Section 2(36) of Central Goods and Service Tax Act defines “Council” and that also recognizes the same.   Further Clause 4 of Article 279A confers powers  on the Council to make various recommendations on various aspects, to the Union and State Governments.  As per Clause 4 (b), the Council can make recommendations to levy tax or grant exemptions on any goods and services. Similarly Clause 4(d) give power  to the Council to fix the threshold limit of turnover below which goods and services may be exempted from goods and services tax. From the above it is clear that the “Board” can act only at the instance of the Council and has no independent power.

Further the “Board” is an independent body constituted under the Central Boards of Revenue Act , 1963 hereinafter called “the Board Act”.  Originally the “Board” is defined under Section 2 (a)  of the above said Act as follows:   “Board” means the Central Board of Direct Taxes or the Central Board of Excise and Customs constituted under section 3”. Thereafter vide Finance Act 18 of 2018 with effect from 29/03/2018 the words “the Central Board of Indirect Taxes and Customs” was substituted and hence as on date the “Board” means the Central Board of Direct Taxes and the Central Board of Indirect Taxes and Customs.  Hence under Section 3 of the said Act the Central Government constituted two Boards i.e., The Board of Direct Taxes and the Board of Indirect Taxes and Customs and each such Board  shall, subject to the control of the Central Government, exercise such powers and perform such duties, as may be entrusted to that Board by the Central Government or by or under any law.

Under the CGST Act,The “Board” is defined under Section 2 (16) of as follows:“ “Board” means the Central Board of Indirect Taxes and Customs constituted under the Central Board of Revenue Act 1963.” Since the Board  Act , under section 3 states that the Board will exercise such power and perform such duties , as may be entrusted by the Central Government or by or under any law,  the “Board” under CGST Act can only perform the recommendations of the Council constituted under Article 279A of Constitution of India. Since the Council did not fix any such monetary limit for the purpose of regulating the filing of appeal or application, the “Board” can not fix such monetary limit for filing appeal or application by the officer of the Central Tax.  It is pertinent to note that under section 268A of the Income Tax Act, specific power is given to the Board  to issue orders, instructions or directions to income tax authorities to fix monetary limit for the purpose of regulating  filing of appeal or application.   Hence, as on date there is no power for the “Board” to fix any monetary limit for the purpose of filing appeal or application before any authority or Court of Law.

But here under the CGST Act, in so far as sub-section 2 is concerned it is of no use as on date.  It is only if any monetary limit is fixed by the Board on the recommendations of the Council, the central tax officer, can not file any appeal or application  if the monetary limit is not exceeding the said limit.  In case. In future if such power is given to the officer of the Central  Tax, and the monetary limit is more than what is fixed by the Board, then the officer  can file an appeal or application on the same or similar issue or question of law for which he had not filed any appeal or application on the ground of less monetary limit.  Further it may be seen that as per sub-section 2 , it shall not preclude the officer from filing appeal or application in any other case involving the same or similar issue or question of law.   Hence it can be taken that the officer can not proceed against an assessee, on the same or similar issue or question of law whose case is withdrawn on the basis of pecuniary jurisdiction.  But that benefit was taken away by sub-section 3 wherein it is stated that no person, being party  in appeal or application shall contend that the officer has accepted the disputed issue where an appeal or application was not filed on the basis of pecuniary jurisdiction.  Similarly sub-section 4  also states that the Appellate Tribunal or Court should take into consideration the circumstances for not filing appeal or application  by the Central Tax Officer.   That makes it clear that  non filing of appeal or application on an issue or question of law  as per direction given under sub-section (1) can not be an estoppel for the central tax officer to agitate the same for other years.

This article is written only for the purpose, that some of the assessee feel that , when there is  a ceiling in the Income Tax Act and Sales Tax Act for prosecuting the appeals the pecuniary jurisdiction is fixed why such ceiling should not be fixed for CGST also. 

The appointed date for section 120 is the First July of 2017 as per the notification No.9/2017 Central tax GSR 658 (E)dated 28-06-2017.However sub section (2) still in paper and not in spirit awaiting for the fixation of the limitation

Authors:

B.Raveendran B,A.BL., DBM.,

Advocate High Court, Chennai,

G.Samidurai M.A.,

Rtd., Dy.Commissioner(CT)(Tamilnadu)

VAT/GST Practitioner