INTRODUCTION
Under GST act,every registered person required, to self assess his tax liability for a tax period and to pay tax due and furnish returns accordingly as per provision of act and rule. Thereafter, proper officer will examine correctness of such returns by excercising powers under various provision of the act and if noticed any under declaration of tax liability, issue adjudication order under relevant section and recover additional dues if any accordingly. Sometimes, taxable person may not agree with such order. It is equally possible that in some cases department may not in agreement with such orders. In this background, appeal provision has been inserted in the act, and given right to any aggrieved person and department to file appeal against such decision or order of adjudicating authority. In this article first appeal provision under GST act has been discussed.
APPEAL MECHANISM
It is provided in section 107 (1) that any aggrieved person by decision or order passed under the act by adjudicating authority may file appeal to the Appellate Authorities prescribed in the act. Similarly, as per section 107 (2) of the act authorised officer, on direction of Commissioner may make an application to such Appellate Authority, in case order is prejudicial to the interest of revenue. Two tier Departmental appeal system has been introduced in the act. Accordingly, first appeal against adjudication order may be filed to the notified appellate authority. Second appeal against first appeal order may be filed to the Appellate Tribunal.
FIRST APPELLATE AUTHORITIES
Central Government vide rule 109 A has notified the Appellate Authority under CGST act. Accordingly, first appeal against any decision or order passed by adjudicating authority under CGST/ SGST /UT act, may be filed by any aggrieved person to
a. Commissioner of Appeal where such order or decision passed by Additional or Joint Commissioner
b. Joint Commissioner of Appeal, where such decision or order passed by Deputy or Assistant Commissioner or Superintend.
State Governments also notified Appellate Authorities for respective SGST act. Maharashtra Government vide rule 109 A. Accordingly, appeal against any decision or order passed under MGST, CGST OR UT act may be filed to
a. Joint Commissioner Appeal where such decision or order is passed by Deputy Commissioner.
b. Deputy Commissioner Appeal where such decision or order is passed by Assistant Commissioner or Sales Tax Officer
JURISDICTION OF APPELLATE AUTHORITIES
Section 6 (3) of the act provides for cross empowerment between CGST and SGST /UT Officers, so as to ensure that if Proper Officer of one act (say CGST ) passes an order with respect to transcation, he will also act as Proper officer of SGST for same transaction and issue order with respect to CGST as well as SGST /UT GST component of same transcation.The act also provides that where Proper Officer under one act (say CGST ) has passed an order, any appeal / review/rectification against said order will required to file with Proper Officer of that act only ( CGST ). Similarly, if any order is passed by Proper Officer of SGST, any appeal/ review /rectification will lie with Proper Officer of SGST only.
EXAMINATION OF DECISION OR ORDER
On receipt of an decision or order, taxable person has to verify the order by comparing it with returns and audit report results and to find out reasons for differential tax and reduction in amount of ITC claimed or refund if any. Thereafter, if he is satisfied with order or decision then there is no need to file appeal and required to act accordingly. However, if taxable person is not satisfied with the results of order, he has to identify the issues of dispute and collect relevant evidences and prepare grounds for submission of appeal. It is necessary to complete this exercise as early as possible in order to file appeal in time. Similarly, Department also make scrutiny of order or decision and record for examination of legality or propriety of said order. If it is noticed that order or decision is not legal, just and proper then application in the nature of appeal is filed u/ 107 (2). Thus, Decisions and orders of the proper Officers are examined at both levels.
NON APPEALABLE ORDERS
As per section 121, all decisions and orders passed under the act are appelable except following
a. Order for transfer of proceeding from one officer to another
b. Order pertaining to the seizure or retention of Books of accounts
c. Order sanctioning prosecution
d. Order for payment in instalment
PROCEDURE TO FILE APPEAL
Any person, who is aggrieved by any decision or order passed by authority, required to file appeal to the Appellate Authorities in FORM-GST-APL 01, along with relevant documents, either electronically or otherwise as notified by Commissioner. Application by authorised Officer u/s 107 (2) has to be filed in in FORM- GST- APL 03. While filing of the appeal, statement of facts and grounds of appeal required to be attached with application. On making payment of amount of pre deposit and filing of the appeal electronically provisional acknowledgment is issued to to the appellant immediately. Thereafter, he has to submit certified copy of decision or order to the Appellate Authority within seven days from the date of filing of appeal and only thereafter it will treated as appeal is filed. Final acknowledgment should be issued by Appellate Authorities in FORM-GST- APL02 and he is not required to verify any details mentioned in application or quantum of pre deposit. It is very important to note that if certified copy of order is not submitted within seven days, then it shall be treated that an appeal is filed on the actual date of submission of certified copy. It is further clarified in Explanation of the rule 108 that an appeal shall be treated as filed only when the final acknowledgment, indicating appeal number is issued.
APPEAL FEE
There is no provision in the act or rule of appeal fees for filing of appeal to the Appellate Authority. Hence, no need to make payment of any fees. However, as per rule 110 (5), an appellant has to pay appeal fees at prescribed rate, while filing second appeal to the Appellate Tribunal against appeal order.
TIME LIMIT TO FILE APPEAL
First appeal by aggrieved person should be filed within three months from the date of communication of said order or decision. However, authorised officer of Department should file an appeal ( application ) within six months from date of communication of such order or decision. In case of delay in filing of appeal by above both parties, section 107 (4) gives power to the Appellate Authorities to condone the delay up to one month if there is a sufficient cause for non filing of appeal by the appellant within time. Therefore, it is necessary to explain the delay in application and give reason for delay along with evidence. In any case no appeal can be filed after four month. Therefore, decision to file appeal must be taken as early as possible and it should be filed within prescribed time.
In the case of M/s Shanti Eat udyog (WP 711of 2018 decided on 18-01-2019 ) Allahabad High Court, on the issue of condonation of delay in filing in appeal beyond one month, and in view of provision section 107 of the act, by relying on Supreme Court Judgment, held that delay condonation application filed beyond the period one month could not be condoned and it was clearly non maintainable.
REQUIREMENT OF PRE DEPOSIT
Under gst act, pre deposit of an prescribed amount is condition precedent to admit appeal.In view of section 107 (6) of the act, an appellant is required to pay whole amount of undisputed, tax,interest and penalty in respect of such order, before filing of an appeal. In addition to the above, in respect of remaining disputed amount of tax, interest and penalty, an appellant should pay 10 % of amount of disputed tax. He is not required to pay any amount out of disputed interest and penalty.Unless above payments are not made before filing of appeal, it would not be admitted. Thus condition of pre- deposit is mandatory and no any provision is made in the act to waive or reduce the amount of pre deposit. Where, separate order is passed for interest or penalty under any section of the act, and same is disputed and intend to file appeal then an appellant is not required to pay any amount as pre deposit for filing of an appeal and appeal will be admitted without any payment.
STAY TO DISPUTED AMOUNT
There is no need to file separate application to stay to disputed dues involved in order appealed against. All detail classification of total dues, disputed dues and admitted dues are declared in the appeal form along with calculation of quantum of pre deposit to be paid.Once the said amount of pre deposit is paid appeal is provisionally admitted and after filing of certified copy of such order it is finally admitted and final acknowledgment is issued in form GST-APL-02 to the appellant. It is made clear in the section 107 (7) that after amount of pre deposit paid by appellant, recovery proceeding for balance amount shall deemed to be stayed. Thus, final acknowledgment is deemed stay order. Admittance of appeal by department itself is treated as stay to recover balance dues as per impugned order.
FINAL HEARING OF APPEAL
During the course of final hearing, the Appellate authority is required to give sufficient opportunity of hearing to the appellant to submit his say and produce documentary evidence in support of his grounds of appeal mentioned in appeal.Authority has been authorised to grant adjournment for sufficient cause. However, such adjournments should not granted more than three times during the hearing of an appeal. During the course of final hearing, an appellant may be allowed to raise any additional ground of appeal, where the Appellate Authority satisfied that omission of that ground from grounds of appeal was not willful and unreasonable. Appellate Authority will verify all grounds and submission made by an appellant with reference to record of such case which issent by theAdjudicating authority and after making further necessary inquiry, by giving sufficient and meaningful opportunity of hearing decide the appeal.
TIME LIMIT TO DECIDE APPEAL
It is specifically provided in the section 107 (13) of the act where it is possible to do so, every appeal shall be decided within period of one year from the date of filing of an appeal.However, it appears that such time limit is in the nature of advisory and not mandatory.
PRODUCTION OF ADDITIONAL EVIDENCE
Earlier under existing law, during the course of appeal hearing,an appellant was generally allowed to produce additional evidence in support of ground raised in appeal.However, as per provision of rule 112, appellant is not allowed to produce before Appellate Authorities any evidence, other than evidence produced by him during the course of proceeding before adjudicating authorised except in the specified contigencies. Therefore, it is important to note that every taxable person must produce all relevant evidences during the course of original proceeding or must request to give time to produce such evidence. Otherwise, it will be difficult to produce evidence in the appeal proceeding.
POWER OF APPELLATE AUTHORITY
The Appellate authority has power to hear and decide appeal. For this purpose he may make any further necessary inquiry. He has power to confirm, modify or annul such decision or order appealed against but can not refer case back to the concerned adjudicating authority. It is well settled by catena of various courts that power of Appellate Authority is co- terminus with that original authority which passed order. He can do what latter could do. He can also do what latter failed to do. In view of above, he has to decide all disputed issues by considering contention and evidences submitted by an appellant and thereafter required to pass such order as it think just and proper to meet end of justice.
PASSING OF ORDER IN APPEAL
After completion of hearing of appeal, Appellate Authority has to pass speaking appeal order. It is clearly provided in the section 107 ( 12 ) f the act that he shall state the points for determination, the decision thereon and reason for such decision. It is expected that he must give reason for decision and it should at least be sufficient to indicate the application of mind. The affected party has to know why the decision has gone against him.Now, it is established that non speaking orders are liable to set aside. This is reason for making specific provision for passing of speaking order. Where the appellant failed to attend to final hearing or to submit his say, the Appellate Authority has to pass just and proper ex-party order on merit by considering grounds of appeal and other documents attached to appeal form and findings of record of the adjudicating officer. No appeal can be dismissed summarily for non attendance. No form is prescribed for appeal order in the rules. However, summary of order is required to be issued in form GST- APL -04 along with appeal order ( rule 113 ), clearly indicating amount of demand confirmed in appeal and amount of demand after appeal.
ENHANCEMENT IN TAX LIABILITY IN APPEAL
The Appellate Authority, has power to make enhancement in tax or reduce ITC etc,on his own motion or on receipt of report from any other officer, after giving sufficient opportunity of hearing to the appellant. ( section 107 (11) ).
COMMUNICATION OF APPEAL ORDER
Unless any order is properly served on the taxpayer it can not be effective. Limitation period to file second appeal against appeal order starts from the date of communication of such order.Therefore communication of order has significance. Therefore, specific provision has been made in act itself section 107 (14 ) for service of appeal order. Accordingly, said order should be communicated to the appellant, the Adjudicating authority and the concerned Commissioner.
NO RESTORATION OF APPEAL
Under some existing laws like Mvat 2002 act, there was provision of restoration of appeal, where the Appellate Authority has dismissed appeal summarily or decided ex-party, when the appellant failed to attend on appointed date. Appellant was required to file an application for restoration of appeal within 30 days from date of receipt of appeal order and to prove that there was sufficient cause for non attendance. Thus, the appellant was given one more opportunity, by restoring an appeal. However, no such provision is present in this act.
INTEREST ON REFUND OF PRE DEPOSIT
If after decision of the appeal, amount paid as pre deposit for admission of appeal found refundable to the appellant, then interest on such deposit shall be paid at specified rate u/s 56 from the date of payment of amount till the date of refund of such amount.
CONCLUSION
If the appellant is not satisfied with the appeal order, he may file second appeal to the Appellate Tribunal u/s 112 (1 ) of the act, against such appeal order within three months from the date of receipt of appeal order. Since, Tribunal has not been constituted in some states, CBIC has issued removal of difficulty order no 9/2029 on 03-12-2019 and thereby extended limitation period. Accordingly, appeal to the Tribunal is required to be filed within three month from the date on which President of the Appellate Tribunal enter office.
Author can be Reached via email at momakanadje@gmail.com.
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