William E Connor And Associates Sourcing Pvt Ltd. Vs Commissioner of CGST (Punjab and Haryana High Court)
Summary: The Punjab and Haryana High Court allowed the petition challenging the Appellate Authority’s order dated 29.08.2024, holding that Section 107(11) expressly prohibits remanding proceedings to the adjudicating authority. The petitioner’s refund claim under Section 54 had been rejected following a show cause notice dated 04.05.2023. In appeal, the petitioner contended that the adjudication order travelled beyond the scope of that notice. Although the Appellate Authority found substance in this contention, it remitted the matter for fresh consideration. The High Court held that the statutory embargo left the Appellate Authority without jurisdiction to issue such a remand direction. It was required to decide the appeal within the statutory framework, which permits confirming, modifying or annulling the decision appealed against. Accordingly, the Court set aside the appellate order and directed the Appellate Authority to revisit the issue in accordance with the applicable law and the Court’s observations. The judgment did not itself allow the refund claim.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. This petition is directed against the order dated 29.08.2024 (Annexure P-1) passed by the Appellate Authority, whereby the matter in issue has been remitted back for fresh consideration by the adjudicatory authority.
2. The order primarily is assailed on the ground that statute itself does not contemplate jurisdiction with the Appellate Authority to remand the proceedings.
3. Section 107(11) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the Act’) provides as under:-
Section 107. Appeals to Appellate Authority.-
(11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order:
xxxx xxxx”
4. The aforesaid provisions contains specific embargo denying the Appellate Authority an opportunity to remand back the matter to the adjudicatory authority.
5. The short question that arises to the facts of the present case is as to whether the Appellate Authority could have remanded the matter to the adjudicatory authority ?
6. It transpires that a claim for refund was instituted by the petitioner under Section 54 of the Act, which was rejected by the adjudicatory authority. The order of the adjudicatory authority was pursuant to show cause notice issued on 04.05.2023. The petitioner challenged the order of the adjudicatory authority primarily on the ground that the order of the authority transgressed the limits of the show cause notice, and therefore, the order was barred. The Appellate Authority has found substance in such contention and has consequently remitted the matter.
7. We are of the view that once the statute does not vest jurisdiction with the Appellate Authority to remand the proceedings back to the adjudicatory authority by virtue of Section 107 (11) of the Act, it was not open for the Appellate Authority to pass such an order. The Appellate Authority was expected to adjudicate the appeal within the four corners of law and pass appropriate order other than the order of remand.
8. Since this has not been done, therefore, the order dated 29.08.2024 (Annexure P-1) cannot be sustained. This petition consequently succeeds and is allowed. The impugned order dated 29.08.2024 (Annexure P-1) passed by the Appellate Authority is set aside. The Appellate Authority is directed to re-visit the issue keeping in view the applicable provisions of law and the observations made as above.
9. All pending miscellaneous application(s), if any, shall also stand disposed of.
