Assistant Commissioner Vs Ram Prashad Swami (GSTAT Ghaziabad)
Summary : The GST Appellate Tribunal, Ghaziabad, dismissed the Department’s appeal in Assistant Commissioner Vs Ram Prashad Swami at the admission stage because the disputed penalty of ₹5,95,440 was below the prescribed ₹20,00,000 monetary limit and the Revenue had not established any recognised exception. The Tribunal expressly confined its decision to maintainability and did not examine or decide the merits of the underlying dispute or approve or reject the first appellate authority’s reasoning.
The dispute arose after vehicle No. DL-1LX-7693, carrying dry fruits, was intercepted at Pusta, Loni, Ghaziabad, at approximately 8:20 p.m. on 24 June 2022. The driver produced tax invoice No. AS/22-23/75 and e-way bill No. 781267378427 for goods valued at ₹27,78,720. The documents recorded a supply by M/s Ashutosh Enterprises to M/s Om Enterprises, GSTIN 07BBKPS5207B1ZT, at its Tilak Bazar address in Delhi. The Department alleged that, although both parties were in Delhi and the documents showed delivery there, the driver stated that delivery was intended at Loni, Ghaziabad. The proprietor appeared and sought release on payment of penalty. The taxpayer maintained that the supplier and recipient were registered, the transactions were recorded in the books, and the goods matched the accompanying documents. It denied any intention to evade tax and attributed any lapse to a driver’s mistake or technical issues. The Additional Commissioner allowed Appeal No. GSTI-ZD0908220053911R and set aside the Mobile Squad order.
Before considering the Department’s challenge, the Tribunal held that admission of an appeal requires examination of its statutory conditions. Relying on Ganga Bai v. Vijay Kumar and Anant Mills Co. Ltd. v. State of Gujarat, it explained that an appeal is a creature of statute and its exercise may be regulated by prescribed conditions. A grievance against an adverse order, or an arguable case on merits, does not itself establish a right to adjudication on merits. Maintainability must be decided first.
The Tribunal examined Section 120 of the Uttar Pradesh Goods and Services Tax Act, 2017, and Circular No. 2425008 dated 5 July 2024, which the order records as prescribing a ₹20 lakh threshold for departmental appeals before GSTAT, subject to exceptions. It also referred to Circular No. 252/2026-27/State Tax dated 22 May 2026 as continuing the State’s litigation-management framework, including review through Zonal Law Committees. Under the calculation method described in the order, only aggregate disputed tax and cess count where tax is disputed, even if interest or penalty is also involved. Where only interest, penalty or late fee is disputed, the relevant disputed component counts; where those components are disputed without tax, their aggregate counts. A disputed erroneous refund is measured by the refund amount, including relevant tax and cess components. Amounts covered by a composite order disposing of multiple appeals or demand notices are taken together. Since this appeal concerned only a penalty of ₹5,95,440, the monetary restriction applied.
The order identified exceptions covering findings that statutory provisions are unconstitutional, subordinate legislation exceeds the parent Act, or government or Board instruments conflict with GST law; recurring or interpretative issues involving valuation, classification, refunds, place of supply or other questions; adverse comments, strictures or costs against the Department; and cases which the Commissioner considers necessary to contest in the interest of justice or revenue. Once the disputed amount falls below the threshold, the Revenue must identify the exception, plead supporting facts and establish its legal or administrative basis. An exception cannot be presumed merely because the Department wishes to appeal.
The Tribunal distinguished authorisation under Section 112(3) from compliance with Section 120 and the monetary-limit instructions. Section 112(3) contemplates examination of the record, satisfaction about the legality or propriety of the order, and specification of the points requiring determination. Section 112(4) treats the authorised application as an appeal under the Act; it does not dispense with the monetary-limit policy. Where the Commissioner’s residual exception is invoked, the record must demonstrate a case-specific opinion supporting litigation despite the threshold. Routine approval or a bare assertion of permission cannot substitute for that exercise, since such an approach would defeat the policy.
After examining the record and FORM GST APL-07, the Tribunal found that no recognised exception had been specifically pleaded or established. There was no relevant constitutional or validity ruling, demonstrated recurring legal question, adverse comment or costs, or recorded case-specific opinion of the Commissioner justifying departure from the limit. The Tribunal invoked Ranadey Micronutrients for departmental discipline in following circulars and S.R.M.B. Dairy Farming for responsible government litigation. It also referred to Greatship, Vikram Cement and Balaji Overseas in its discussion of statutory remedies, monetary limits and pending litigation. The order further explained that Section 120(2)–(4) protects the Revenue against an inference of acquiescence merely because an appeal is not filed under the monetary-limit policy and preserves its ability to contest similar issues in other cases.
The appeal was accordingly dismissed at the threshold for failure to satisfy the applicable conditions of admission and maintainability. The Tribunal declined the Revenue’s invitation to examine the merits, reiterating that neither routine authorisation nor a merits argument overcomes the binding monetary restriction. It directed the Registrar to supply a copy of the order to the appellant.
Cases Discussed
- Commissioner of Commercial Tax v. Vikram Cement — decision dated 5 February 2026 (Supreme Court of India). Cited in the supplied order for application of the monetary-limit instruction to pending appeals while leaving the legal question open.
- Commissioner of Customs, New Delhi v. Balaji Overseas Etc. — Civil Appeal Nos. 9032–9034 of 2019, disposed of on 3 May 2024 (Supreme Court of India). Cited for disposal owing to low tax effect; the supplied order records the disputed amount as ₹1,28,73,481.
- State of Maharashtra v. Greatship (India) Ltd. (Supreme Court of India), 2022. Referred to in the Tribunal’s discussion of statutory appellate remedies and the governing statutory framework.
- Director of Income Tax v. S.R.M.B. Dairy Farming (P) Ltd. — 2017 taxguru.in 1194 (Supreme Court of India). Relied upon for reducing unnecessary government litigation and repeated judicial scrutiny.
- Ranadey Micronutrients v. CCE — 87 ELT 19 (SC); (1996) 10 SCC 387 (Supreme Court of India). Relied upon for consistency and discipline in following departmental circulars.
- Anant Mills Co. Ltd. v. State of Gujarat — (1975) 2 SCC 175 (Supreme Court of India). Cited for the legislature’s power to impose conditions regulating exercise of the statutory right of appeal.
- Ganga Bai v. Vijay Kumar — (1974) 2 SCC 393 (Supreme Court of India). Cited to distinguish the ordinary right to institute a civil suit from the statutory right of appeal.
FULL TEXT OF THE JUDGMENT/ORDER OF GSTAT
1. Preliminary
1.1 From perusal of case record it transpire that Vehicle No. DL-1LX- 7693, carrying dry fruits, was intercepted at Pusta, Loni, Ghaziabad, at approximately 8:20 p.m. on 24 June 2022 Subsequently on demand driver produced tax invoice No. AS/22-23/75 and e-way bill No. 781267378427, covering goods valued at Rs. 27,78,720. Seized documents showed supply by M/s Ashutosh Enterprises to M/s Om Enterprises, GSTIN 07BBKPS5207B1ZT, at 2326, Third Floor, Gali Hinga Beg, Tilak Bazar, Delhi-110006. The Department alleges that, although both consignor and consignee were located in Delhi and the documents showed delivery at Tilak Bazar but driver stated that the goods were to be delivered at Loni, Ghaziabad. The proprietor appeared and requested release on payment of penalty. The original-order records a penalty of Rs.5,95,440 . The taxpayer contended that both supplier and recipient were GST-registered, the transactions were recorded in the books, and the physical goods matched the accompanying documents. It denied any intention to evade tax and attributed any lapse to the driver’s mistake or technical issues. The Additional Commissioner allowed Appeal No. GSTI- ZD0908220053911R and Mobile Squad order was set aside.
2. We heard learned Authorised Representative and examined the appeal memorandum, the impugned order and the material on record. As Admission of an appeal is not a mere formality hence before considering the merits, the Tribunal must be satisfied that the appeal is maintainable and meets the conditions for admission. Filing an appeal does not, by itself, give the appellant a right to a hearing on merits. The right of appeal is created by statute and must be exercised subject to the conditions prescribed by law. In this regard we refer to Honble Apex Court decision in Ganga Bai v. Vijay Kumar (1974) 2 SCC 393.
2.1. “15. The main controversy before us centres round the question whether that appeal was maintainable. On this question the position seems to us well established. There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring a suit of a civil nature and unless the suit is barred by statute one may, at one’s peril, bring a suit of one’s choice. It is no answer to a suit, howsoever frivolous to claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute.”
2.2. In the same way we must follow direction of the Hon’ble Apex court provided in Anant Mills Co. Ltd. v. State of Gujarat (1975) 2 SCC 175 ” 40. The right of appeal is the creature of a statute. Without a statutory provision creating such a right the person aggrieved is not entitled to file an appeal. We fail to understand as to why the Legislature while granting the right of appeal cannot impose conditions for the exercise of such right. In the absence of any special reasons there appears to be no legal or constitutional impediment to the imposition of such conditions. It is permissible, for example, to prescribe a condition in criminal cases that unless a convicted person is released on bail, he must surrender to custody before his appeal against the sentence of imprisonment would be entertained. Likewise, it is permissible to enact a law that no appeal shall lie against an order relating to an assessment of tax unless the tax had been paid. Such a provision was on the statute book in Section 30 of the Indian Income Tax Act, 1922. The proviso to that section provided that “…no appeal shall lie against an order under sub-section (1) of Section 46 unless the tax had been paid”. Such conditions merely regulate the exercise of the right of appeal so that the same is not abused by a recalcitrant party and there is no difficulty in the enforcement of the order appealed against in case the appeal is ultimately dismissed. It is open to the Legislature to impose an accompanying liability upon a party upon whom legal right is conferred or to prescribe conditions for the exercise of the right. Any requirement for the discharge of that liability or the fulfilment of that condition in case the party concerned seeks to avail of the said right is a valid piece of legislation, and we can discern no contravention of Article 14 in it”.
2.3. Hence we are of considered view that admission is not a mere formality rather it is very crucial legal question to be answered at the admission stage itself. The Tribunal cannot decide the merits and afterwards examine whether the appeal met the conditions for admission or not Such course of action is neither legally sound nor logically proper.
3. The question at the admission stage
3.1 Since admittedly it is a departmental appeal, the first question is whether the Department has complied with the statutory and administrative conditions governing such an appeal. The existence of a grievance against the impugned order does not, by itself, answer that question.
3.2 first of all we consider Section 120 of the Uttar Pradesh Goods and Services Tax Act, 2017, which bears the heading “Appeal not to be filed in certain cases”. Section 120(1) provides: (1) The Commissioner may, on the recommendations of the Council, from time to time, issue orders or instructions or directions fixing such monetary limits, as he may deem fit, for the purposes of regulating the filing of appeal or application by the officer of the State tax under the provisions of this Chapter.” Under this provision, the Commissioner, State Tax, Uttar Pradesh, issued Circular No. 2425008 dated 05.07.2024. It prescribes a monetary limit of Rs. 20,00,000 for departmental appeals before GSTAT, subject to specified exceptions. Its purpose is to reduce government litigation and ensure proper use of judicial resources.
3.3 The State’s litigation-management framework continued through Circular No. 252/2026-27/State Tax dated 22.05.2026, concerning monetary limits, review of departmental appeals and litigation before GSTAT and the higher constitutional courts. The monetary-limit policy cannot, therefore, be treated as an abandoned administrative arrangement.
4. Issues for determination
4.1 Does the monetary limit of Rs. 20,00,000 apply to this departmental appeal?
4.2 Is the disputed amount, calculated in the manner prescribed by the circular, below that limit?
4.3 If so, has the Revenue specifically pleaded and established a recognised exception?
4.4 Is a statement that the Commissioner has approved or authorised the appeal sufficient to establish an exception?
4.5 Does filing and pursuing the appeal without establishing an exception violate the binding litigation policy?
4.6 What is the consequence of this failure at the admission stage?
4.7 Can the appeal be admitted and heard on merits?
5. Method for Calculation of the disputed amount
5.1 The circular prescribes the following method for applying the monetary limit:
5.2 Where tax is disputed, with or without interest or penalty, only the aggregate disputed tax, including CGST, SGST or UTGST, IGST and Compensation Cess, is taken into account.
5.3 Where only interest is disputed, the disputed interest is considered.
5.4 Where only penalty is disputed, the disputed penalty is considered.
5.5 Where only late fee is disputed, the disputed late fee is considered.
5.6 Where interest, penalty and/or late fee are disputed, but no tax is disputed, their aggregate disputed amount is considered.
5.7 Where an erroneous refund is disputed, the disputed refund amount, including the relevant tax and Compensation Cess components, is considered.
5.8 The limit applies to the disputed amount for which the appeal or application is proposed.
5.9 Where a composite order disposes of more than one appeal or demand notice, the relevant amounts are taken together. The limit is not applied separately to each appeal or demand notice.
5.10 Thus, where the demand includes tax, interest and penalty, the relevant amount is the disputed tax and cess. Interest and penalty are not added to that amount for this purpose. If the amount so calculated is below Rs. 20,00,000, the monetary restriction applies unless a recognised exception is established. On examining the record, we find that in the present matter disputed demand is penalty of Rs. 5,95,440 which is obviously below Rs. 20,00,000. Hence we find that in this matter monetary limit/ restriction is fully attracted.
6. Exceptions to the monetary limit
6.1 An amount below the monetary limit does not end the enquiry. Clause 4 of the circular permits departmental litigation, irrespective of the monetary limit, in the following circumstances:
6.2 A provision of the CGST Act, UPGST Act, IGST Act or GST (Compensation to States) Act has been held unconstitutional.
6.3 A rule or regulation made under any of those Acts has been held to exceed the authority conferred by the parent Act.
6.4 An order, notification, instruction or circular issued by the Government or the Board has been held to be contrary to the relevant GST Act or Rules.
6.5 The matter concerns valuation, classification, refunds, place of supply or another issue which is recurring and/or involves interpretation of the Act, Rules, notification, circular, order or instruction.
6.6 Strictures or adverse comments have been made, and/or costs have been imposed, against the Government, the Department or its officers.
6.7 The Commissioner considers it necessary to contest a case or class of cases in the interest of justice or revenue.
7. Burden of establishing an exception
7.1 An exception cannot be presumed merely because the Department wishes to pursue an appeal. The party relying on an exception must establish that it applies. Once the disputed amount is shown to be below Rs. 20,00,000, the Revenue must identify the exception, state the facts supporting it and show the statutory or administrative basis for invoking it. If the Revenue relies on the Commissioner’s residual power to contest a matter in the interest of justice or revenue, it must produce the order or recorded opinion showing that the Commissioner exercised that power in the particular case. These requirements cannot be left to inference. A bare statement that the appeal has been filed with the Commissioner’s permission is not sufficient.
8. Authorisation and compliance with the monetary limit
8.1 Permission to file an appeal and compliance with the conditions governing that appeal are separate and distinct matters. An authorisation to file an appeal does not, by itself, establish an exception to the monetary limit. Section 112(3) of the UPGST Act, 2017, provides: “(3) The Commissioner may, on his own motion, or upon request from the Commissioner of central tax, call for and examine the record of any order passed by the Appellate Authority or the Revisional Authority under this Act or under the Central Goods and Services Tax Act, 2017 for the purpose of satisfying himself as to the legality or propriety of the said order and may, by order, direct any officer subordinate to him to apply to the Appellate Tribunal within six months from the date on which the said order has been passed or the date, as may be notified by the Government, on the recommendations of the Council, for the purpose of filing application before the Appellate Tribunal under this Act, whichever is later, for determination of such points arising out of the said order as may be specified by the Commissioner in his order.” The provision requires that the Commissioner would examine the record, form an opinion on the legality or propriety of the order, and identify the points to be placed before the Tribunal. The record must enable the Tribunal to examine the basis of that decision. A bare assertion that the Commissioner has granted permission does not meet this requirement.
8.2 . Section 112(4) further provides: “(4) Where in pursuance of an order under sub-section (3) the authorised officer makes an application to the Appellate Tribunal, such application shall be dealt with by the Appellate Tribunal as if it were an appeal made against the order under sub-section (11) of section 107 or under sub-section (1) of section 108 and the provisions of this Act shall apply to such application, as they apply in relation to appeals filed under sub-section (1).” An application authorised under Section 112(3) is therefore dealt with as an appeal under the Act. That authorisation does not dispense with Section 120 or the monetary-limit instructions issued under it. Where the residual exception is invoked, the record must show that the Commissioner considered this particular case and formed the opinion that it should be contested despite the monetary limit. The basis of that opinion must be apparent. General approval cannot serve as a substitute. Otherwise, every appeal below the limit could proceed on routine authorisation, defeating the policy itself.
9. Continuing litigation policy of Uttar Pradesh
9.1 . Circular No. 252/2026-27/State Tax dated 22.05.2026 provides a structured review mechanism through Zonal Law Committees and continues the policy of limiting departmental litigation by monetary thresholds, subject to specified exceptions. This policy requires institutional discipline. The Department cannot treat it as binding when it assists the Department and as optional when it restricts an appeal. The State is expected to conduct litigation responsibly and consistently with its declared policy. In Director of Income Tax V. S.R.M.B. Dairy Farming (P) Ltd., Hon’ble Supreme Court recognised the need to reduce unnecessary government litigation and repeated proceedings through different levels of judicial scrutiny.
10. Binding effect of departmental circulars
10.1 The Department cannot rely on a statutory litigation-control mechanism when convenient and disregard it merely because an order has gone against it. In Ranadey Micronutrients v. CCE 87 ELT 19 (SC)/(1996) 10 SCC 387, the Supreme Court stressed the importance of consistency and discipline in following departmental circulars. It held that the Revenue could not repudiate the Board’s circular on the ground that it was inconsistent with a statutory provision. The principles applied under comparable revenue laws also support the conclusion that instructions issued by the competent revenue authority to regulate departmental appeals bind departmental officers.
11. The right of appeal and the conditions governing it
11.1 The Revenue may argue that Section 112 gives it a statutory right of appeal and that an appeal directed by the Commissioner must be admitted. We cannot accept that argument as an absolute proposition. Section 112 must be read with the provisions governing departmental litigation, including Section 120. As explained in Ganga Bai and Anant Mills, the right of appeal is statutory and may be subject to conditions. The existence of appellate jurisdiction does not require the Tribunal to admit every departmental appeal without examining compliance with those conditions.
12. Whether an exception is established in this case
12.1 We have examined the record and FORM GST APL-07. The appellant states that this appeal has been filed under Section 112(3) of the UPGST Act. However, the Revenue has neither specifically pleaded nor established any recognised exception to the monetary limit. There is no material showing that a provision of the relevant GST Acts has been held unconstitutional; that a rule has been held contrary to its parent Act; or that a notification, circular or instruction has been held invalid. Nor has the Revenue shown that this case involves a recurring question of law requiring authoritative determination, that adverse comments or costs have been imposed against the Department, or that the Commissioner has recorded the required opinion for contesting this particular case in the interest of justice or revenue despite the monetary limit. We therefore find that the Revenue has failed to establish an applicable exception.
13. Effect of the monetary limit on pending matters
13.1 The right of appeal must be exercised within the statutory framework. In State of Maharashtra v. Greatship (India) Ltd. , Hon’ble Supreme Court reiterated that an appeal is a creation of statute. The Department’s right is accordingly subject to the conditions and regulatory provisions of the statutory scheme. In Commissioner of Commercial Tax V. Vikram Cement, decided on 5 February 2026, Hon’ble Supreme Court considered the Rs. 20 lakh GST monetary limit and held that the circular applied to pending appeals as well. The appeals involving a tax component below the prescribed limit were dismissed, while the legal question was left open for an appropriate case. In Director of Income Tax V. S.R.M.B. Dairy Farming (P) Ltd. , the Supreme Court noted that repeated government litigation contributes to the growing number of pending cases. It referred to the National Litigation Policy and the need to secure decisions on meaningful issues rather than pursue multiple levels of scrutiny merely for their own sake. In Commissioner of Customs, New Delhi v. Balaji Overseas, the Supreme Court also disposed of the appeals on the ground of low tax effect, having regard to the applicable monetary threshold. The disputed amount in those appeals was Rs. 1,28,73,481.
13.2 Tax law is part of public law. The State has extensive powers to collect taxes, but those powers must be exercised according to law. The same requirement applies when the State litigates. An appeal is not an unrestricted means of challenging every adverse order. The revenue involved, the legal importance of the issue, the public interest, the cost of litigation and the need for authoritative determination must be considered. The Rs. 20 lakh limit does not mean that a smaller demand has no legal importance. It reflects the policy that, ordinarily, public resources are better used by avoiding departmental appeals below that amount, unless a specified exception applies.
14. Maintainability must be examined before the merits
14.1 The Revenue has invited us to consider the merits of the dispute. We decline to do so because maintainability must be decided first. The Tribunal cannot decide the merits and only afterwards examine whether the appeal met the conditions for admission. An arguable case on merits does not, by itself, overcome the binding monetary-limit policy.
15. Public interest and responsible litigation
15.1 Government litigation uses judicial time, departmental resources and public money. It also takes the time of officers and taxpayers and uses the Tribunal’s limited capacity. The monetary-limit policy is intended to ensure that the State litigates where the amount involved, the legal significance, the recurring nature of the issue, the public interest or a recognised exception justifies doing so. The statutory scheme also protects the Revenue from being treated as having accepted a disputed legal position merely because an appeal is not filed under the monetary-limit policy. Section 120(2) and (3) of the UPGST Act provide: “(2) Where, in pursuance of the orders or instructions or directions issued under sub-section (1), the officer of the State tax has not filed an appeal or application against any decision or order passed under the provisions of this Act, it shall not preclude such officer of the State tax from filing appeal or application in any other case involving the same or similar issues or questions of law.” “(3) Notwithstanding the fact that no appeal or application has been filed by the officer of the State tax pursuant to the orders or instructions or directions issued under sub-section (1), no person, being a party in appeal or application shall contend that the officer of the State tax has acquiesced in the decision on the disputed issue by not filing an appeal or application.” Section 120(4) further provides: “(4) The Appellate Tribunal or court hearing such appeal or application shall have regard to the circumstances under which appeal or application was not filed by the officer of the State tax in pursuance of the orders or instructions or directions issued under sub- section (1).”
16. Findings
16.1 This is a departmental appeal and is governed by the monetary- limit policy applicable to departmental litigation. The relevant disputed demand is penalty of Rs. 5,95,440 which is below Rs. 20,00,000. The Revenue has failed to establish any recognised exception to the monetary limit. No material shows that the Commissioner specifically exercised the residual power, with reasons relating to this case, so as to bring the appeal within an exception. A mere statement that the Commissioner has approved or authorised the appeal cannot replace compliance with the statutory provisions and binding litigation policy. Hence this appeal cannot be admitted for adjudication on merits.
Order
17.1 For the reasons stated above, we hold that this departmental appeal involves a disputed penalty of Rs.5,95,440 which is below the prescribed monetary limit of Rs. 20,00,000. The Revenue has failed to establish any recognised exception. The appeal therefore does not meet the conditions governing its admission and maintainability before this Tribunal. Accordingly, the appeal is dismissed at the threshold on the ground of the prescribed monetary limit and the Revenue’s failure to establish an applicable exception.
17.2 It is made clear that We have not examined or decided the merits of the tax dispute. Nothing in this order shall be read as approving or rejecting the correctness of the impugned order on merits. The dismissal is confined to the maintainability of the departmental appeal under the applicable monetary-limit policy.
17.3 The appeal stands disposed of accordingly. The Registrar shall supply a copy of this order to the appellant.
Pronounced in open Tribunal proceeding.
