How to handle Cases in front of GSTAT [Appellate Authority] – Brief Overview

Overview: Although the GST law was introduced on 1st July 2017, even in 2025, taxpayers continue to face issues and often remain dissatisfied with the orders passed by GST authorities. As a result, many taxpayers file appeals in the High Court. To address such grievances and to reduce the burden on higher judiciary, the government established the GST Appellate Authority, which handles appeals involving monetary disputes exceeding ₹20 lakhs.

1. Introduction and Constitutional Framework

The Goods and Services Tax Appellate Tribunal (GSTAT) represents a critical component in India’s GST dispute resolution framework. After nearly eight years since GST implementation, the GSTAT is finally becoming operational with the notification of the GST Appellate Tribunal (Procedure) Rules, 2025 on April 24, 2025.

The constitutional foundation for GSTAT lies in Article 323B of the Constitution of India, inserted through the 42nd Amendment in 1976. This article empowers appropriate legislatures to establish tribunals for tax-related matters, including “levy, assessment, collection and enforcement of any tax.” The article further authorizes establishment of a hierarchy of tribunals and provides for exclusion of court jurisdiction except the Supreme Court under Article 136.

The GSTAT is established under Section 109 of the Central Goods and Services Tax (CGST) Act, 2017, serving as the second appellate forum in the GST dispute resolution hierarchy, after the first appellate authority (under Section 107) or revisional authority (under Section 108).

2. Statutory Provisions

• Section 107 to 121 of CGST Act, 2017 [Chapter XVIII]
• Rule 108 to 116 of CGST Rules, 2017 [Chapter XIII]
• Notification No.02/2017-CT dated 19.06.2017 – Central Tax Appeals Jurisdiction
• Circular No.1/1/2017 dated 26.06.2017 and Circular No.3/3/2017 dated 05.07.2017
  has prescribed the powers of Central tax officers under different sections and rules
• Circular No. 31/05/2018 dated 09.02.2018 has prescribed monetary limits for issuance of notices and adjudication of cases.

3. Appeals Process Before GSTAT

Section 107. Appeals to 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 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.

Who is an adjudicating authority 2(4)

Any authority, appointed or authorized to pass any order or decision under this Act

a. Notification No. 02/2017- CT dated 19.06.2017 Appointment of officers [21 Zones]

b. Circular No.1/1/2017 dated 26.06.2017 and Cir No.3/3/2017 dated 05.07.2017 -powers of Central tax officers under different sections and rules

Does not include

a. CBIC, Revisional Authority

b. AAR and AAAR

c. Appellate Authority, Appellate Tribunal

d. Anti Profiteering Authority

Appealable Orders

• Registration Cancellation Order under Section 29
• Refund Rejection Order under Section 54-RFD-06
• Assessment Order under Section 62 – non-filers
• Assessment Order under Section 63 – unregistered persons
• Demand Order under Section 73 or 74
• Detention Order under Section 129
• Confiscation Order under Section 130

Non-Appealable Orders

Section 121 provides that no appeal shall lie against the following orders

a. an order of the Commissioner or other authority empowered to direct transfer of proceedings from one officer to another officer; or

b. an order pertaining to the seizure or retention of books of account, register and other documents; or

c. an order sanctioning prosecution under this Act; or

d. an order passed under section 80 – Payment under instalments

Time Limit

3 months from the date of communication to such person

Section 169(1) specifies the modes of communication for any decision, order, summons, notice or any other communication

> by giving or tendering it directly or by a messenger including a courier

> by registered post or speed post or courier with acknowledgement due

> by sending a communication to his e-mail address

> by making it available on the common portal

Section 169(3) assumes that the registered post or speed post or courier shall reach the intended person within normal time of transit unless otherwise proved – courier track

SAHULHAMEED – MADRAS HC, ONLY ONLINE PORTAL NOT SUFFICIENT.

Issues in Time Limit

• Delivering the order copy to authorized representative – treated as communication.
• Date of communication to authorized representative – to be considered for time limit of 3 months.
• Not a date of Summary Order, date calculated from Date of detailed Order
• Condonation period – 1 month (sufficient cause to be shown)
• Can Appellate Authority condone the delay beyond 1 month? – No. But High Court can condone the delay in exercise of Writ Jurisdiction (Apotex Research Pvt Ltd Vs UOI & Eswari Global Metal Industries Ltd Vs UOI)
• Contrary decisions in – Vikas Shankar Joshi Vs Addl CCE & ST.
  

Pre-deposit for filing the appeal

Section 112(8) of CGST Act (as amended) requires:

10% of the remaining amount of tax in dispute. Maximum – 20 crores each CGST +SGST

Admitted tax + Interest + penalty to be paid in full

In case of E-way bill orders – 25% pre-deposit of the disputed penalty

In case of only penalty – Finance Act, 2025 proposed pre-deposit of 10%

In exceptional cases, High Court can grant relief from pre-deposit under Article 226/227

Eligibility and Grounds

• Appeals can be filed by any person aggrieved by an order passed against them under Section 107 (appellate authority) or Section 108 (revisional authority).
• Unlike appeals before the first appellate authority (which allows “any person aggrieved”), GSTAT appeals can only be filed by a person against whom the order was passed.

Documentation Requirements

Appeals must be accompanied by:

• Certified/attested copy of the order being appealed
• Copies of all relevant documents including relied-upon documents
• The prescribed fee (₹1,000 per ₹1 lakh disputed, maximum ₹25,000)

Filing Procedure

As per the GSTAT (Procedure) Rules, 2025:

• Appeals must be filed electronically on the GSTAT Portal in the prescribed form
• Each aggrieved person must file a separate appeal (joint appeals not permitted)
• If one order-in-appeal deals with multiple original orders, separate appeals are required for each original order
• All documents must be clearly legible, duly paged, indexed, and firmly tagged Procedural Framework under GSTAT Rules, 2025

The GSTAT (Procedure) Rules, 2025, provide a comprehensive framework organized into fifteen chapters:

Key Procedural Aspects

Filing and Registration:

• Appeals must be filed online on GSTAT Portal in the prescribed form with proper cause title, paragraphing, and numbering
• Scrutiny by Registrar; defective appeals may be returned for correction
• Admitted appeals are numbered and registered in the appropriate register

Cause List and Hearing Procedure:

• Registrar prepares and publishes the cause list with priority order: pronouncement, clarification, admission, orders, part-heard cases, then numerical order
• Ordinary sitting hours are 10:30 a.m. to 1:30 p.m. and 2:30 p.m. to 4:30 p.m.
• Proceedings are generally open to public unless ordered otherwise

Evidence Rules:

• Additional evidence generally not permitted unless the Tribunal deems it necessary
• The Tribunal may call for documents or summon witnesses on points at issue
• Production of evidence by affidavit is allowed, with cross-examination permitted if necessary

Digitalization and Hybrid Hearings:

• Electronic filing and processing mandated via GSTAT Portal
• Hearings may be conducted in physical mode or electronically with President’s permission
• All proceedings recorded on the portal

Order Pronouncement and Rectification:

• Orders must be in writing, signed, and dated by bench members
• Timeline: within 30 days from final hearing (excluding vacations/holidays)
• Rectification of clerical mistakes allowed on application or suo motu
• Appeals may be referred to a larger bench in case of difference of opinion

5. Special Powers and Functions

Powers Similar to Civil Court

Under Section 111(2) of CGST Act, the GSTAT has powers similar to a civil court for:

• Summoning and enforcing attendance
• Requiring discovery and production of documents
• Receiving evidence on affidavits
• Requisitioning public records
• Issuing commissions for examination of witnesses or documents
• Dismissing representations for default or deciding ex parte
• Setting aside dismissal orders

Inherent Powers

Rule 10 of GSTAT Procedure Rules grants the Tribunal inherent powers to make orders or give directions necessary for meeting the ends of justice or preventing abuse of the Tribunal process.

Execution of Orders

Section 111(3) provides that orders of the GSTAT may be enforced as if they were decrees made by a court in a suit, following procedures under Order 21 of the Civil Procedure Code.

Monetary Limits for Departmental Appeals

To curb excessive litigation, the GST Council recommended specific thresholds:

• Rs. 20 lakh for appeals to GSTAT
• Rs. 1 crore for High Courts
• Rs. 2 crore for the Supreme Court

Anti-Profiteering Transition

A significant development is the transfer of anti-profiteering cases under Section 171(2) to the Principal Bench of GSTAT, coupled with a sunset clause effective April 1, 2025, after which new anti-profiteering applications are not accepted.

7. Practical Challenges and Considerations

Timeline for Operationalization

While the procedures are now notified, the actual start of GSTAT functioning depends on:

• Full appointment of Judicial and Technical members
• Physical infrastructure readiness across 31 State Benches
• Operationalization of the GSTAT Portal
• Notification of the date when the President and Vice-Presidents “enter office”

Potential Initial Caseload

Once operational, GSTAT is likely to face a significant influx of pending appeals that have accumulated due to its absence over the years. Managing this initial surge efficiently will be crucial.

Procedural Drafting Issues

Several drafting inconsistencies have been identified in the GSTAT Procedure Rules, such as:

• Rule 50 on referring matters to a larger bench appears ultra vires Section 109(9), which mandates referral to another single member
• Some rule references contain circular language or undefined terms
• Certain provisions like Rule 80 (allowing advocates to attest affidavits) may lack statutory backing

8. Impact on Stakeholders

For Taxpayers and Businesses

The GSTAT offers several advantages:

• Access to a specialized forum with technical and judicial expertise
• Potentially faster dispute resolution compared to High Courts
• Uniformity in GST law interpretation across states
• Convenience through e-filing and hybrid hearings
  However, challenges remain:
• 10% pre-deposit creates cash flow impact
• Adaptation to new procedures and electronic systems
• Potential delays in full operationalization

Facts of the case

All essential facts to be brought on record

Explain how assessee business operates

Facts should be simple and understandable

The introduction of new facts at appellate stage would not be allowed

Facts should be supported by sufficient documentary evidence

Details of filing reply, attending personal hearing should be mentioned

Any other correspondence after attending the PH shall be mentioned

Validity of order

• Unreasoned order – Sec 75 requires the officer to give reasons while passing the order
• Allahabad HC in Ansari Construction Vs Addl Commr has observed Department miserably failed to verify the facts from their own records.
• Violation of Principles Of Natural Justice
• Order Going beyond SCN
• Passed beyond time-limits u/s 73 and 74
• Whether Summary of Order in DRC-07 is uploaded online
• Is DIN required to be quoted on every order?

9. Structure and Composition of GSTAT

Principal and State Benches

The GSTAT consists of a Principal Bench in New Delhi and multiple State Benches across India. Currently, 31 State Benches have been designated throughout the country, strategically located to serve different states and regions.

Composition of Benches

• Principal Bench: Consists of the President, one Judicial Member, one Technical Member (Centre), and one Technical Member (State).
• State Benches: Each comprises two Judicial Members, one Technical Member (Centre), and one Technical Member (State).
• Vice-President: The senior-most Judicial Member within the State Benches is designated as Vice-President for those benches, exercising specified powers of the President.

Jurisdictional Distribution

The distribution of cases follows clear jurisdictional principles:

1. Principal Bench Exclusive Jurisdiction:

• Appeals involving any issue related to “place of supply”
• Anti-profiteering matters under Section 171(2) of CGST Act
• Any other matters specifically notified by the government on GST Council’s recommendation

2. State Benches: Handle all other appeals against orders passed by Appellate Authorities or Revisional Authorities within their territorial jurisdiction.

3. Single Member Bench: For appeals where the disputed amount (tax, input tax credit, fine, fee, or penalty) does not exceed ₹50 lakhs and no question of law is involved, a single member may hear the case with the President’s approval.

10. Conclusion

The GST Appellate Tribunal represents the missing link in India’s GST dispute resolution mechanism. Its establishment completes the multi-tiered appeal structure envisioned under the GST framework and should bring greater consistency, specialization, and efficiency to GST litigation.

The notification of the GSTAT Procedure Rules marks a significant milestone, but practical challenges in infrastructure, appointments, and caseload management remain. The success of this institution will ultimately depend on swift operationalization across all benches, adequate staffing, and the effective implementation of the procedural framework established by the rules.

Forms and Registers

The Rules prescribe several standardized forms and registers to ensure uniformity:

• GSTAT FORM-01: For interlocutory applications
• GSTAT FORM-02: Order sheet format
• GSTAT FORM-03: Application for inspection of records
• GSTAT FORM-04: Memorandum of appearance
• GSTAT FORM-05: Main appeal form
• GSTAT FORM-06: Summons for production of documents
• GSTAT CDR-01 to 08: Various registers for case tracking

Total Benches