Understanding Appeals & Revision Mechanism under GST

The Goods and Services Tax (GST) regime in India aims to establish a transparent and efficient indirect tax system. Despite the self-assessment mechanism and technological integration, disputes may arise between taxpayers and tax authorities regarding assessments, classifications, input tax credits, penalties, refunds, and other GST-related matters. To ensure fairness and provide remedies against adverse decisions, the CGST Act provides a structured mechanism for appeals and revisions.

This article provides an overview of the appeal and revision mechanism under GST, including procedural aspects and the timelines prescribed for filing appeals and revision.

The beginning point of any litigation is Show Cause Notice. Question of filling appeal under GST is raised only after adjudication of Show Cause Notice. First, understand about the Show Cause Notice and its adjudication.

1. SHOW CAUSE NOTICE IN GST

A Show Cause Notice (SCN) is a formal notice issued by the tax authorities to a taxpayer under Section 73/74 of the Act, requiring them to explain or justify a particular action or inaction that is in violation of the GST laws. The purpose of a Show Cause Notice is to give an opportunity to the taxpayer to explain their actions, and to provide evidence or arguments that show that the violation was not intentional or that the taxpayer was not at fault.

A SCN can be issued under the following circumstances:

• Tax not paid or short paid with or without the intent to fraud
• ITC Wrongly availed/utilised
• Errorneous Refund

Note: Above circumstances covered are only under Section73/74 of CGST Act 2017. Kindly note that SCN can be issued in many other circumstances also. e.g rejection of registration application, returns not filed within due time etc.

Time Limit to Issue SCN

Under Section 73: cases not involving fraud or willful misstatement

The proper officer must issue a SCN at least three months prior to the time limit prescribed for passing the adjudication order.

The time limit for passing an order is within 3 years from the due date for filing the Annual Return for the financial year to which the tax not paid, short paid, or erroneous refund relates.

Under Section 74: cases involving fraud, suppression of facts, or willful misstatement

The proper officer must issue the SCN at least six months prior to the expiry of the limitation period prescribed for passing the adjudication order.

The time limit is within 5 years from the due date of filing the Annual Return or from the date of erroneous refund, whichever is applicable.

Hierarchy of Appeals under GST

The GST law provides the following appellate hierarchy:

1. Adjudicating Authority

2. Appellate Authority

3. GST Appellate Tribunal (GSTAT)

4. High Court

5. Supreme Court

2. ORDER OF ADJUDICATING AUTHORITY

Adjudicating authority means any authority, appointed or authorised to pass any order but does not include the Central Board of Indirect Taxes and Customs, the Revisional Authority, the Authority for Advance Ruling, the Appellate Authority for Advance Ruling, the National Appellate Authority for Advance Ruling, the Appellate Authority, the Appellate Tribunal and the Authority referred to in sub-section (2) of section 171.

Initially, a SCN is issued. Thereafter, the assessee submits a reply to the SCN. Subsequently, a personal hearing is conducted by the adjudicating authority. After considering the reply filed by the assessee and the submissions made during the hearing, the adjudicating authority passes an order. The order may either confirm the liability proposed in the SCN, wholly or partly, or drop the proceedings if the assessee’s contentions are found to be satisfactory.

Monetary Limits for Adjudication

3. APPEALS TO APPELLATE AUTHORITY (SECTION 107)

Any person aggrieved by a decision or order passed by an adjudicating authority may file an appeal before the Appellate Authority.

Time Limit

• Any person aggrieved may file an Appeal within three months from the date of communication of the order.
• The Commissioner can also initiate an appeal on their own motion or upon request from a State/Union Territory Commissioner if they believe an order is improper or illegal. This must be done within six months from the date of communication of the order.

The Appellate Authority may condone a delay of up to one additional month if sufficient cause is shown.

Pre-deposit Requirement

Before filing an appeal, the appellant must pay:

• Full amount of admitted tax, interest, fine, fee, and penalty.
• 10% of the disputed tax amount, subject to a maximum of Rs. 20 crore

In case of any order demanding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to 10% of the said penalty has been paid by the appellant.

Hearing under Appeal

• Opportunity of being heard shall be granted before Appellate Authority pass the order. Adjournment to the hearing can be granted if sufficient cause is shown. However maximum three adjournment can be granted.
• At the time of hearing of an appeal, appellant shall be allowed to add any ground of appeal not specified in the grounds of appeal, if the authority is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable.

Powers of the Appellate Authority

The Appellate Authority may:

• Confirm the order.
• Modify the order.
• Annul the order.

But shall not refer the case back to the adjudicating authority that passed the said decision or order:

Decision of Appeal

The Appellate Authority will hear and decide every appeal within a time limit of 1 year from date of filing of appeal and the order shall be communicated to the appellant, respondent and adjudicating authority. Also to jurisdictional commissioner and the same shall be final and binding on all parties.

4. REVISION UNDER GST (SECTION 108)

Meaning of Revision

Revision is a supervisory power exercised by higher authorities to examine the legality and propriety of orders passed by subordinate officers. The Revisional Authority can revise the original order, i.e., it can pass an order to overrule the order of such officer in the interest of revenue.

Unlike an appeal, revision is generally initiated by the tax administration and not necessarily by an aggrieved taxpayer.

 Revisionary Powers of Commissioner

The Commissioner may, on his own motion or upon information received, call for and examine the records of any proceeding and revise an order if it is found to be:

• Erroneous.
• Prejudicial to the interest of revenue.
• Illegal or improper.
• Associated with an observation or directive from the Comptroller and Auditor General (CAG)

Conditions for Revision

The Commissioner cannot revise an order if:

• the order has been subject to an appeal before appellate authority, appellate tribunal, High Court or Supreme Court.
• the time limit for a departmental appeal (six months) has not expired, or more than three years have passed since the order.
• the order has already been taken for revision at an earlier stage.

If appeal is filed and any point has not been raised and decided in an appeal, the time limit to revise the order is three years from the date of order sought to revised or one year from the date of order in appeal whichever is later.

Time Limit for Revision

The Commissioner must exercise revisionary powers within three years from the date of the order sought to be revised.

Opportunity of Being Heard

Before passing a revision order, the taxpayer must be given a reasonable opportunity of being heard, ensuring compliance with the principles of natural justice.

5. APPEAL TO GST APPELLATE TRIBUNAL (SECTION 112)

The GST Appellate Tribunal is a specialized court, second tier appellate forum that hears appeals related to GST matters. It acts as a common platform to settle conflicts between taxpayers and tax authorities. It deals with:

• Appeals against orders from the Appellate Authority
• Appeals against orders from the Revisional Authority
• Anti-profiteering cases where businesses are accused of not passing on GST benefits to customers

 Process For Filing An Appeal

Any person not satisfied with an order passed by the Appellate Authority (u/s 107) or Revisional Authority (u/s 108) can file an appeal before the GST Appellate Tribunal (GSTAT).

The timeline for filing an appeal is:

• In all cases where the order sought to be appealed against is communicated before 1st April 2026, the appeal may be filed before the Appellate Tribunal up to 30th June 2026. (This move provides a one-time extended window for taxpayers to contest past orders that could not be appealed earlier due to non-constitution of the Tribunal, while bringing certainty for future litigation timelines).
• For orders communicated on or after 1st April 2026, the appeal is to be filed within three months from the date of communication.

The GSTAT can condone a delay of up to another 3 months on sufficient cause being shown. And for Departmental Appeals, the time limit is 6 months, with a similar 3-month condonation period.

Pre-Deposit Requirements:

No appeal shall be filed unless the appellant has paid:

• The full amount of tax, interest, fine, fee, and penalty arising from the impugned order, as is admitted by him; and
• A sum equal to twenty percent (20%)of the remaining amount of tax in dispute arising from the said order upto a max of 20 Cr for both CGST and SGST individually.

Hearing and Disposal:

Upon admission, the Tribunal issues notice to the respondent and schedules hearings. The proceedings are quasi-judicial in nature, with opportunities provided for both parties to present arguments, evidence, and legal submissions.

The Tribunal will hear and decide every appeal within a period of one year, where possible, from the date on which such appeal is filed. The Tribunal is empowered to pass such orders as it thinks just and proper, including confirming, modifying, or annulling the impugned order.

6. APPEAL TO THE HIGH COURT (SECTION 117)

An appeal may be filed before the High Court against an order of the GST Appellate Tribunal if the case involves a substantial question of law.

 Time Limit

The appeal must generally be filed within 180 days from the date of communication of the Tribunal’s order. If the time limit has expired, High Court can entertain appeal if it is satisfied that there was sufficient cause for not filing it within such period.

 Scope

The High Court can decide on any issue which

• has not been determined by the State Bench or Area Benches
• has been wrongly determined by the State Bench or Area Benches, due to the question of law raised.

Decision and Hearing

Where an appeal has been filed before the High Court, it shall be heard by a Bench of not less than two Judges of the High Court, and shall be decided with the opinion of such Judges or of the majority, if any, of such Judges. In case of no outcome due to a difference in opinion, the case will be heard (limited to the point of conflict) by at least one other judge and a decision shall be taken on a majority basis, considering the opinions of both the original and new judges.

For any appeal between 2 or more states or for a conflict of opinion between the State and the Centre, the cases will go directly to the Supreme Court.

7. APPEAL TO THE SUPREME COURT (SECTION 118)

The Supreme Court is the final judicial authority in GST disputes.

An appeal lies before the Supreme Court:

• Against orders passed by the Principal Bench of the GST Appellate Tribunal.
• Against judgments of the High Court in GST matters.

Also, as mentioned earlier, cases involving 2 states or a conflict of opinion between the State and Centre will be automatically appealed to the Supreme Court.

Time Limit

The GST Act does not provide any time limit to file appeal to Supreme Court in GST.

However, the order incorporated in the Supreme Court Rules, 1996 specified the time limit of 60 days for filling appeal under the Cetntral Excise Act and the Customs Act. It is expected that the same time will be specified for filling appeal to Supreme Court under GST Act.

Raising an appeal to the Supreme Court under GST provides a final platform for the resolution of disputes that arise between businesses, individuals, and the government regarding the implementation and interpretation of the GST laws. The procedure for raising an appeal is straightforward, and the Supreme Court has the power to pass an order or direction that resolves the dispute.

Related Provisions:

Interest on Refund of Pre-deposit (Section 115): If an amount paid as a pre-deposit for an appeal under Sections 107 or 112 becomes refundable, interest at the rate specified under Section 56 (not exceeding 9%) is payable from the date of payment until the date of refund.

Non-Appealable Orders (Section 121): No appeal can be filed against certain administrative orders, such as orders transferring proceedings, seizing or retaining books of account, sanctioning prosecution, or orders for payment in instalments under Section 80.

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For any further information or clarification, the author can be reached at cashubhikhandelwal@gmail.com

DISCLAIMER: The views expressed are strictly of the author. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.