Exemplary example for first appellate authority in GST law.

The GST officials all over India have been passing orders till now as per their own understanding of the law as the clarity on the extant legal position was not available. The Top Court of our country on 13/12/2024 in the matter of Team Computers Private Limited Versus Union of India & Ors. - 2024 (12) TMI 875 - SC Order in para 6 expressed their concerns on these issues as 'We would like to first know at the earliest why the Goods and Services Tax Appellate Tribunal has not been made functional till this date'. Probably this triggered the setting up of the GSTAT benches and today this case has not been decided and when the Government may answer stating that GSTAT is operational as on date, it is true that sufficient infrastructure is not yet ready and many benches are having only temporary shelter with CBIC premises and not the one of their own.

Be that as it may, despite several hardships, the GSTAT has started pronouncing orders based on the second appeal which is a major remedy for the taxpayers. Unlike the writs before high courts where finality is not arrived and matter is simply remanded with appropriate instructions to decide the case with compliance of legal provisions, the benches of GSTAT pass the final order based on the facts as well as the legal position. One such order was reported in The Commissioner, CGST & Central Excise, Raigad Commissionerate Versus M/s. Godrej Tyson Foods Limited. - 2026 (7) TMI 1904 - GSTAT THANE.

The facts of the case are very simple which are elaborated for the benefits of all concerned. The basic issue is when goods are sold by claiming exemption in line with Serial number 9 of notification number 02/2017-CT (Rate), whether the GST could be demanded by treating the name of the company which is printed on packages to identify the supplier, as branded goods to attract GST. The dispute pertains to the period 05/01/2021 to 17/07/2022 covering three financial years. SCN was issued on 15/02/2024 invoking section 74 in gross violation of CBIC instructions dated 13/12/2023. All the information were available in GST returns and which information was suppressed is a question to be analysed. The adjudicating authority on 02/08/2024 confirmed all proposals as per SCN including equal penalty on GST of 2,26,77,883. Aggrieved by the above proposal, the taxpayer preferred the first appeal. The OIA was passed on 21/03/2025 holding that GST is not leviable as exemption is available as per the notification.

The Commissioner went on second appeal before the Thane Bench of GSTAT and the division bench on 22/07/2026 passed the final order in favour of the taxpayer.

The operative portion reads as '5.13 In view of the above observations and the settled legal position, we are of the opinion that the cessation of the use of the brand name on the packaging, while continuing to print the company's name for statutory compliance, does not amount to affixing a 'brand name'. Even for the period post 18.07.22, as regards 'prepackaged and labelled' goods, in terms of Rule 3 of the Legal Metrology (Packaged Commodities) Rules, 2011, packages intended for institutional consumers do not qualify as pre-packaged commodities meant for retail sale. Accordingly, the goods supplied by the respondent are eligible for the exemption under Notification No. 02/2017-CT(Rate) dated 28.06.2017 as amended. Consequently, the demand for tax, interest, and penalty cannot be sustained. Accordingly, we do not find any infirmity in the impugned Order-in-Appeal No. DA/1084/RGD-APP/2024-25 dated 21.03.2025, hence the same is upheld.

6. For the facts and reasons discussed above, the appeals filed by the Revenue are accordingly dismissed'.

Key take aways for us:

1. The GSTAT is determined to pass unbiased orders in the days to come based on the legal position. Accordingly, as GST operates on one country one tax concept, field formations must strictly adhere to these orders which are binding on all officers at both adjudication as well as first appeal levels.
2. The first appellate authority in the instant case has acted without any fear or bias which is expected for the first appellate authority in the best interest of administration of GST which helps in reduced litigation. The cost on the taxpayer due to the department's decision must also be reimbursed as the taxpayer was forced to appear as respondent which has a cost.
3. The officer who passed the OIO may examine for himself on what basis section 74 was invoked as the issue is due to interpretation of law and not due to suppression or wrong statement. Monthly returns as well as annual returns are filed with exhaustive information on HSN. This case law must be an eye opener to stop all disputes on identical issues in the days to come. It is a fact that two members have to examine the legality which proves that this is a fit case under 73 and not 74.
4. The SCN was issued within permissible time under 73 and 74 was invoked with ulterior motives.
5. CBIC/ Commissioners at STATE TAX levels may ensure that all the decisions passed by all the benches of GSTAT are made accessible to all concerned tax officials who pass OIO as well as OIA. This shall reduce the litigation in a significant manner by not raising a non-issue.
6. The purpose of this article is to pass the message to all concerned in simple language with out mentioning legal provisions more than the actual requirements.

It is concluded that the 56th GST Council meeting deserves appreciation which has made the GSTAT a reality. More good orders are expected from many benches of GSTAT in 2026. The 57th GST Council meeting may be convened as quickly as possible and in all cases latest by 31/08/2026 so as to keep the gap between two successive meetings less than one year as 56th meeting took place on 03/09/2025. The entire country shall be obliged to GST Council in case the threshold limits for registration under GST are revisited as the limits at 20 lakhs and 40 lakhs were fixed during initial years of GST.