FIRST APPEAL UNDER THE PROVISIONS OF GST LAWS

Introduction

The provisions of GST Act provide for the payment of tax by the taxable person by means of self-assessment. If there is any contravention of this procedure or failed to pay tax then the department may be determined the tax, interest etc., under section 73 and 74 (now section 74A) of Central Goods and Services Tax Act, 2017 (‘Act’ for short). The proper officer, after taking the due process of law, determine the case and adjudicated the matter.

First Appeal

Against the said order the appeal may be filed before the First Appellate Authority, Commissioner (Appeals). Section 107 of the Act provides that any person who is aggrieved by a decision or order passed against him by an adjudicating authority, can file an appeal to the Appellate Authority viz. Commissioner of GST (Appeals).

First Appellate Authorities

Any person aggrieved by any decision or order passed under this Act may appeal to-

1. the Commissioner (Appeals) where such decision or order is passed by the Additional or Joint Commissioner;
2. 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.

Orders against which appeal cannot be filed

Appeals can be filed against the following orders-

• an order of the Commissioner or other authority empowered to direct transfer of proceedings from one officer to another officer;
• an order pertaining to the seizure or retention of books of account, register and other documents; or
• an order sanctioning prosecution under the Act; or
• an order passed under section 80 (payment of tax in instalments).

Disputes against which appeal can be filed

• Misclassification of goods or services or both;
• Wrong application of a notification;
• Incorrect determination of time and value of supply of goods or services or both;
• Incorrect admissibility of input tax credit of tax paid or deemed to be paid;
• Incorrect determination of the liability to pay tax on any goods or services or both;
• Whether the applicant is required to be registered?
• Rejection of application for registration for incorrect ground;
• Cancellation of registration for incorrect reason;
• Transfer/initiation of recovery/special mode of recovery;
• Tax wrongly collected/Tax not paid to Government;
• Determination of tax not paid or short paid;
• Refund on wrong ground/refund not granted/interest on delayed refund;
• Fraud or wilful suppression of fact;
• Anti profiteering related matters;
• Others.

Limitation

The time limit for the party to file an appeal before the First Appellate Authority is 3 months from the date of communication of the impugned order.

Filing of appeal

Appeal shall be filed in Form GST-APL 01 electronically along with the copies of the documents along with the certified copy of the order. If the certified copy of the order is not attached, the appellant is to upload the certified copy of the order within 7 days from the date of filing the appeal. The day on which the certified copy is uploaded will be taken as the date of filing appeal. A provisional acknowledgement in Form GST APL – 02 by the Registry.

If the appeal is not filed within the limitation period, the appellant is to file a delay condonation petition, indicating the reasons for the delay in filing appeal. The First Appellate Authority is empowered to condone the delay only up to 30 days from the limitation period. After that the Authority is not entitled to condone the delay.

The Appeal shall be considered by the Registry. If the appeal is correct in all aspects, the Registry will issue an acknowledgement in Form GST APL – 02.

Pre-Deposit

The appellant can file appeal only after making the payment-

• in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and
• a sum equal to 10% of the remaining amount of tax in dispute arising from the said order, subject to a maximum of Rs.20 crores, in relation to which the appeal has been filed.
• In case of penalty only 10% of the penalty shall be paid.

The pre deposit may be paid by cash or the balance in the electronic credit ledger. Once the appellant has paid the pre deposit the recovery proceedings for the balance amount shall be deemed to be stayed.

Appeal/application by the Department

The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or the Commissioner of Union territory tax, call for and examine the record of any proceedings in which an adjudicating authority has passed any decision or order for the purpose of satisfying himself as to its legality direct any officer subordinate to him to apply to the Appellate Authority within 6 months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order.

The authorised officer makes an application to the Appellate Authority in Form GST APL – 03. Such application shall be dealt with by the Appellate Authority as if it were an appeal made against the decision or order of the adjudicating authority. Such authorised officer were an appellant and the provisions of this Act relating to appeals shall apply to such application.

An application to the Appellate Authority by the Department shall be filed in FORM GST APL-03, along with the relevant documents, electronically and a provisional acknowledgement shall be issued to the appellant immediately.

The appeal may be filed by the Commissioner (Appeals) where such decision or order is passed by the Additional or Joint Commissioner; any officer not below the rank of Joint Commissioner (Appeals)where such decision or order is passed by the Deputy or Assistant Commissioner or the Superintendent, within 6 months from the date of communication of the said decision or order.

Withdrawal of appeal

Rule 109C provides the procedure for withdrawal of the appeal filed.

The appellant may, at any time before issuance of show cause notice under  section 107(11) or before issuance of the order, whichever is earlier, in respect of any appeal filed in FORM GST APL-01 or FORM GST APL-03, file an application for withdrawal of the said appeal by filing an application in FORM GST APL-01/03W.

Where the final acknowledgment in FORM GST APL-02 has been issued, the withdrawal of the said appeal would be subject to the approval of the appellate authority and such application for withdrawal of the appeal shall be decided by the appellate authority within seven days of filing of such application.

Any fresh appeal filed by the appellant pursuant to such withdrawal shall be filed within the time limit specified in Section 107.

New grounds

The Appellate Authority 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, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable.

Order

The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order. The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision.

The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed. 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 1 year. The Appellate Authority shall communicate the order passed by it to the appellant, respondent and to the adjudicating authority.

A copy of the order passed by the Appellate Authority shall also be sent to the jurisdictional Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority designated by him in this behalf.

Where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under section 73 or section 74 or section 74A.

Binding of the order

Every order passed under this section shall, subject to the provisions of section 108 (Revision) or section 113 (order of Appellate Tribunal) or section 117 (Appeal to High Court) or section 118 (Appeal to Supreme Court) be final and binding on the parties.

Enhancement of penalty

An order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order.