(a) That a time of about 34 months have been completed after implementation of Goods & Service Tax. After its implementation always there remain a plethora of litigation in between of tax payer and revenue authorities. That being new law and it is always inevitable to have difference of opinion and having lot of flaws in the law and which are being rectified day and night by the revenue department through various amendment as undertaken and passed through GST Council. That whenever there are two opinion arises and it is always lead to creating dispute amongst the party.
(b) That provision related to Appeals and Revision under GST Laws are crafted under Chapter XVIII of Central GST Act, 2017 containing section 107 to 121 wherein provisions related to Appeals and Revision in which appeal before First Appellate Authority, Appellate Tribunal, High Court and Supreme Court are provided. That as per hierarchy the order of lower authorities are challenged before higher forums and thus in this line the order of first appellate authority i.e. Addl./Joint Commissioner (as applicable according to hierarchy) are appellable before GST Tribunal as constituted u/s. 109 of CGST Act.
(c) That there is huge plethora of litigation arising against rejection of Export Refund, non allowing/ short allowing of Input tax credit, Trade Discount, valuation mechanism, place of supply, wrong/ illegal/fake claim of Input tax credit, Circular Trading, Detention of vehicle alongwith goods u/s. 138 etc. and there is huge list of such issues. That while doing so the adjudicating authority is required to pass adjudication order and which is subject to appeal before appellate authority u/s. 107 of CGST Act. That in accordance with provision of sub-section (13) of Section 107 which provides that “The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year form the date on which it is filed: Provided that 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.” That order of first appellate authority is subject to challenge before second appellate authority i.e. before GST Tribunal u/s. 112 of CGST Act and in which period of three months from the date of order sought to be appealed against is communicated to the person preferring the appeal.
(d) That section 110 prescribes about the qualification, appointment, conditions of service etc. of members of Appellate Tribunal. As in accordance with these provision Regional/ Area Bench will consist of THREE MEMBERS sitting at one which consists of one member from State GST, one from Central GST and Judicial Member as retired justice of Supreme/High Court and thus Quorum of Bench will be of thrice and thus it lead to create of difference and will derogate powers of Judicial Member as cases will be heard and ordered by Bench with majority of two members and thus in such situation Technical members are having common consensus and they may passed order and there will be no role of Judicial Member and thus it is amount to abuse of Jurisprudence. Thus in such anomaly several Writs in various High Court have been filed across India and which are still pending and it will be subject to coming out of final decision by Hon’ble Supreme Court.
(e) Now two issues have been crop up in those cases which are pending with first Appellate Authority i.e. (i) That in some of the cases the appellate authority on the pretext of not having any further remedial option with the appellant has not decided the cases yet and these are pending since more than one year and thus it is in against the provision of section 107(13) and (ii) in those cases in which order has been passed by the appellate authority but due to non operationalzing of Appellate Tribunal the appellant has become remediless. Thus to over come such scenario the CBIC has issued Order no.9/2019-Central Tax dt. 3.12.2019 and thereafter now Circular no.: 132/2/2020-GST dt.18.3.2020 has been issued which provides as below:-
Clarification in respect of appeal in regard to non-constitution of Appellate Tribunal – reg. Various representations have been received wherein the issue has been decided against the registered person by the adjudicating authority or refund application has been rejected by the appropriate authority and appeal against the said order is pending before the appellate authority. It has been gathered that the appellate process is being kept pending by several appellate authorities on the grounds that the appellate tribunal has been not constituted and that till such time no remedy is available against their Order-in-Appeal, such appeals cannot be disposed. Doubts have been raised across the field formations in respect of the appropriate procedure to be followed in absence of appellate tribunal for appeal to be made under section 112 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST Act”).
2. The matter has been examined in detail. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of the law across field formations, the Board, in exercise of its powers conferred by section 168 (1) of the CGST Act, hereby issues the following clarifications and guidelines.
3.1 Appeal against an adjudicating authority is to be made as per the provisions of Section 107 of the CGST Act. The sub-section (1) of the section reads as follows: – Page 2 of 3 “107. (1) 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.”
3.2 Relevant rules have been prescribed for implementation of the above Section. The relevant rule for the same is rule 109A of Central Goods and Services Tax Rules, 2017 which reads as follows
“109A. Appointment of Appellate Authority.- (1) 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 may 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, within three months from the date on which the said decision or order is communicated to such person.”
3.3 Hence, if the order has been passed by Deputy or Assistant Commissioner or Superintendent, appeal has to be made to the appellate authority appointed who would not be an officer below the rank of Joint Commissioner. Further, if the order has been passed by Additional or Joint Commissioner, appeal has to be made to the Commissioner (Appeal) appointed for the same.
4. 1 The appeal against the order passed by appellate authority under Section 107 of the CGST Act lies with appellate tribunal. Relevant provisions for the same is mentioned in the Section 112 of the CGST Act which reads as follows: – “112 (1) Any person aggrieved by an order passed against him under section 107 or section 108 of this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act may appeal to the Appellate Tribunal Page 3 of 3 against such order within three months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal.”
4.2 The appellate tribunal has not been constituted in view of the order by Madras High Court in case of Revenue Bar Assn. v. Union of India and therefore the appeal cannot be filed within three months from the date on which the order sought to be appealed against is communicated. In order to remove difficulty arising in giving effect to the above provision of the Act, the Government, on the recommendations of the Council, has issued the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019. It has been provided through the said Order that the appeal to tribunal can be made within three months (six months in case of appeals by the Government) from the date of communication of order or date on which the President or the State President, as the case may be, of the Appellate Tribunal enters office, whichever is later.
4.3 Hence, as of now, the prescribed time limit to make application to appellate tribunal will be counted from the date on which President or the State President enters office. The appellate authority while passing order may mention in the preamble that appeal may be made to the appellate tribunal whenever it is constituted within three months from the President or the State President enters office. Accordingly, it is advised that the appellate authorities may dispose all pending appeals expeditiously without waiting for the constitution of the appellate tribunal.
5. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
Thus by going with the above circular the time limit for filing of appeal by appellant i.e. either by assessee OR by department against the order of first appellate authority is extended till further unlimited time till the Appellate Tribunal are constituted. At present assessee is having remedy against the order which have been passed by first Appellate Authority by way of filing of Writ Petition before High Court but still in that circumstances assessee will have to show the urgency of the case before HC as otherwise it will be set aside on the basis of this Circular and thus otherwise this circular is not providing any relief to assessee rather augmenting argument of the Government before High Court.
Provision Referred : Section 107 to 112 and Rule contained under chapter XIII of CGST Rules