Section 112 (2) of the CGST Act 2017 is fine and it is discretionary.

It is interesting to note that the legislature has completely done the required justice to reduce the litigation on small amounts of dispute before the benches of the GSTAT. Section 112 (2) reads as " The Appellate Tribunal may, in its discretion, refuse to admit any such appeal where the tax or input tax credit involved or the difference in tax or input tax credit involved or the amount of fine, fee or penalty determined by such order, does not exceed fifty thousand rupees". This is to minimize the litigation based on the quantum of dispute. Over and above, section 120 grants power to CBIC to prescribe monetary limits and based on the GST Council recommendations, such limits were already set. Be that as it may, this sub section is not applicable for filing appeal by the department as a larger limit is prescribed by CBIC as below:

The circular states that these are only general guidelines and cases should not be filed based on the fact that disputed amount exceeds the above limit. However, there are few exceptions as well such as recurring nature, classification, refunds etc. where appeals could be filed by department even when disputed amount is less than prescribed monetary limits as above.

This being so, interestingly one appeal was filed before GSTAT Bench by the GST officials wherein the total disputed amount stands at 36,363/ only. The department fairly agreed before the GSTAT bench that the amount does not exceed 50,000/. The bench quickly concluded as "6. We have gone through the grounds of appeal and findings recorded by First Appellate Authority. There are no substantial grounds to challenge the order impugned in lower amount of tax and penalty in dispute. In our opinion, no ends of justice would be sub served if appeal is admitted for hearing on its virtues and vices". Accordingly, the tribunal concluded by stating "7. Thus, considering the facts and circumstances of the case, this appeal is liable to be dismissed, in view of provision contained in section 112(2) of CGST/UPGST, Act, 2017 and accordingly, appeal is dismissed summarily".

Case reference: Amber Kumar Bhaskar Versus M/s. S. & G. Pharma - 2026 (8) TMI 1789 - GSTAT AGRA

Key take aways: (only for the taxpayers). Section 112 (2) grants discretionary powers to the GSTAT to refuse to admit small value cases with an intention to avoid the avoidable litigation. However, if the issue is recurring in nature, an appeal may be filed by the taxpayer with strong grounds of appeal to convince the GSTAT to admit the appeal. Even under worst scenario, in case the bench is not inclined to admit, the order must specifically state that the appeal is rejected purely on quantum of dispute and not on merits, because, our field formation is capable of raising small demands again and again or raise huge demands by stating that GSTAT has not admitted the taxpayer appeal.

The circular dated 26/06/2024 as above states the situations under which Department may file appeal below the monetary limits prescribed and such situations are applicable for the taxpayers as well. Anyway, it is not worth to approach the GSTAT by the taxpayer where the gross disputed amount is less than 50,000 due to inherent risks associated with 112 (2) as well as considering the cost of the litigation.

An analysis of the above case which was filed by the GST Authorities reveals that the appeal was filed on 20/04/2026 despite the section 112(2) being in force since 01/07/2017 and Circular having been issued on 26/06/2024 itself. The facts reveal categorically that it is a appeal by the revenue against the taxpayer M/S S. & G. PHARMA, PROPRIETOR, 68 PRATIKSHA ENCLAVE Agra Dayal Bagh UPAGR 282002. Why the CBIC should not issue another circular quoting the above case to avoid such frivolous appeals in future?.

Suggestions: Taxpayers must always keep in mind that as a general rule, in case gross disputed amount in first appeal is less than 50,000, second appeal is not suggested.

Tax officials must scrupulously follow the above circular, as this circular though issued by CBIC is applicable for all SGST acts as well due to the fact that copy of circular was based on GST Council recommendations and the circular was marked to all concerned including state tax officials.

This small exercise shall definitely reduce the litigation in the long run. It is really heartening to note that GSTST benches are working fine and final orders have started to be passed which are available in the public domain now. These GSTAT orders must be seen by tax officials to pass orders in line with the GSTAT views on the issues concerned.