The term ‘Appeal‘ is not defined in GST law. An ‘appeal’ is usually understood as a submission of a lower court’s or authority’s decision or order to higher jurisdictional court or authority for review with a prayer for reversal, or for modifying, or for curing any defect in a decision/order.
In Bolin Chetia v. Jagadish Bhuyan[1], the Apex Court observed that “in its natural and ordinary meaning an appeal is a remedy by which a cause determined by an inferior forum is subjected before a superior forum for the purpose of testing the correctness of the decision given by the inferior forum. The right of appeal is a substantive and valuable right of any appellant who is normally a person aggrieved by the impugned decision”.
Right to appeal is a statutory right, as against a constitutional or a natural right, and it flows from a particular statute. However, once conferred by a statute, such a right becomes a substantive right. In Brij Bihari Singh v Commissioner Commercial Tax Lucknow and Another [2022 (5) TMI 348 – Allahabad High Court], the Court held that the statutory right of appeal is not an illusory remedy given to the assessee or a person aggrieved. It is an effective and real remedy granted within the structure of the statute to allow for redressal of genuine grievances.
GST law has elaborate provisions on the subject. Chapter XVIII (Sections 107 to 121) of the CGST Act, 2017, and Chapter XIII (Rules 108 to 116) of the CGST, Rules, 2017 deal with ‘Appeals and Revision’ in the central GST law. This article deals with the process of filing the first appeal by the taxpayer.
The first appeal stage under GST law is the appeal against the order of the adjudicating authority. Section 107 of the CGST Act confers the statutory right to an aggrieved person to file an appeal against any decision or order by an adjudicating authority. Sub-section 107 (1) reads as:
“Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.
An aggrieved person can file an appeal against any decision or order passed by an adjudicating authority under CGST/SGST/UTGST Act.
1. Adjudicating Authority
The term “adjudicating authority” has been defined under Section 2 (4) of the CGST Act:
“adjudicating authority” means any authority, appointed or authorised to pass any order or decision under this Act, 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.”
2. Appellate Authority
As per Section 2 (8) of the CGST Act),“Appellate Authority” means an authority appointed or authorised to hear appeals as referred to in section 107. Further, Rule 109A of the CGST Rules, 2017, inserted w.e.f 15.11.2017, provides for “Appointment of Appellate Authority”. Accordingly, an aggrieved person may file an appeal to:
a. the Commissioner (Appeals) where such decision or order is passed by the Additional or Joint Commissioner;
b. any officer not below the rank of Joint Commissioner (Appeals) where such decision or order is passed by the Deputy or Assistant Commissioner or Superintendent.
This is a departure from the earlier central excise / service tax law where all such appeals lied with the Commissioner (Appeals).
[For filing appeals with State Authorities, the relevant SGST Rules may be referred.]
3. Time Limit and COD
The time limit for exercising the right to the first appeal is three months from the communication of decision or order to the aggrieved person. However, as per ss. 107 (4) of the CGST Act, the Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the specified period of three months, allow it to be presented within a further period of one month.
It is advised that an appellant seeking condonation of delay must submit sufficient grounds for the same.
The High Courts have held in various judgments that since the appeal is to be filed through electronic mode only (other mode not yet specified), the time limit would start when the order is uploaded on the portal.
4. Form of Appeal
As per ss. 107 (5) every appeal u/s 107 shall be in such form and manner as may be prescribed. As per Rule 108 of the CGST Rules, every such appeal shall be filed in FORM GST APL-01, along with the relevant documents, either electronically or otherwise as may be notified by the Commissioner, and a provisional acknowledgement shall be issued to the appellant immediately. For verification and signing of the appeal rule 26 ibid. may be referred.
Further, as per Sub-Rule 108 (3), a certified copy of the decision or order appealed against shall be submitted within seven days of filing the appeal and a final acknowledgement, indicating appeal number shall be issued thereafter in FORM GST APL-02 by the Appellate Authority or an officer authorised by him in this behalf . The appeal shall be treated as filed only when the final acknowledgement, indicating the appeal number, is issued.
As per proviso to sub-rule 108 (3), where the certified copy of the decision or order is submitted within seven days from the date of filing the FORM GST APL-01, the date of filing of the appeal shall be the date of the issue of the provisional acknowledgement and where the said copy is submitted after seven days, the date of filing of the appeal shall be the date of the submission of such copy.
5. Mandatory Pre-Deposit
There are three limbs of the condition of pre-deposit for filing the appeal:
- Such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order which is admitted is to be paid in full.
- A sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed.
- In respect of goods/conveyances seized in transit, a sum equal to 25% of the penalty imposed[2].
6. Automatic Stay
Where the appellant has paid the requisite amount (s) for filing the appeal, as per ss. 107 (7) the recovery proceedings for the balance amount shall be deemed to be stayed.
7. Hearing/Adjournment of Hearing
The statute requires the Appellant Authority to give an opportunity to the appellant of being heard. The appellate authority may, if sufficient cause is shown, grant a maximum of three adjournments to the appellant party.
8. Additional Grounds during Personal Hearing
If the Appellate Authority is satisfied that the omission of a ground from the grounds of appeal was not wilful or unreasonable, it may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal.
9. Additional Evidence at Appellate Stage
As per Rule 112 of the CGST Rules, the appellant shall not be allowed to produce any additional evidence at the appellate stage unless the adjudicating authority refused to admit such evidence, or the appellant was prevented by sufficient cause to produce the evidence at the adjudication stage, or he was not given sufficient opportunity at the adjudication stage. Though this provision is in Rules and not in the Act itself, the taxpayers must be cautious while pleading the case at the adjudication stage to ensure proper submission of evidences.
10. Order by the Appellate Authority
The Appellate Authority may pass such an order as it thinks just and proper. The order shall state the points for determination, the decision thereof, and reasons for such decision. The Appellate Authority may confirm, modify, or annul the order appealed against. Such decision, where it is possible to do so (and unless stayed by Tribunal or a court) will be within one year from the filing of the appeal. As per Rule 113 of the CGST Rules, the Appellate Authority shall, along with its order u/ss. 117 (11) , issue a summary order in Form GST-APL-04 clearly indicating the final amount of demand confirmed.
Disclaimer: The views, thoughts, and opinions expressed in the text belong solely to the author, and are author’s interpretation of the provisions. These are purely for information purposes and are not legal opinion of any sort. For any query, the author can be reached at viney.go@gmail.com.
[1] https://indiankanoon.org/doc/1305732/
[2] As per proviso to ss.107 (6), inserted w.e.f 01.01.2022.
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