Computing GSTAT Appeal Fee under Rule 110(5) - Why the Words "Or" and "Involved" Matter

A Small Filing Fee Raises a Larger Question of Statutory Interpretation

With the constitution and functioning of the Goods and Services Tax Appellate Tribunal (GSTAT), the procedural provisions governing appeals have acquired immediate practical importance. One such provision is Rule 110(5) of the CGST Rules, 2017, which prescribes the fee payable to file or restore an appeal before the Tribunal.

At first glance, the Rule appears straightforward. It prescribes a fee of Rs. 1,000 for every Rs. 1 lakh of the amount specified therein, subject to a minimum of Rs. 5,000 and a maximum of Rs. 25,000. The difficulty arises in identifying the amount on which this fee is to be calculated when an adjudication order contains more than one monetary component-for example, tax or ITC together with interest and penalty.

The answer turns substantially on the language chosen by the rule-making authority. Rule 110(5) repeatedly uses the word "or", uses the expression "involved" in relation to tax and ITC, omits "interest" from the main computational formula while expressly mentioning it in the proviso, and nowhere uses expressions such as "aggregate", "total" or "sum of". These drafting choices raise an important question: does the Rule contemplate alternative bases of computation depending upon the subject matter of the appeal, or does it require all monetary consequences of the order to be added together?

What Exactly Does Rule 110(5) Provide?

Rule 110(5) provides that the fee for filing or restoring an appeal shall be Rs. 1,000 for every Rs. 1 lakh of "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 in the order appealed against", subject to a maximum of Rs. 25,000 and a minimum of Rs. 5,000.

The proviso separately provides that the fee for filing an appeal against an order not involving any demand of tax, interest, fine, fee or penalty shall be Rs. 5,000.

The wording deserves careful attention. The various monetary expressions in the main provision are repeatedly separated by "or". The Rule does not say "tax and input tax credit and fine, fee and penalty". Nor does it refer to the "aggregate amount", "total amount" or "sum total" of all monetary liabilities determined by the adjudicating authority. The natural starting point, therefore, is that the Rule identifies different statutory bases for computation according to the nature of the dispute involved in the appeal.

This does not mean that an appellant can simply select whichever component produces the lowest fee. The applicable limb has to be identified objectively from the impugned order, the grounds of appeal and the relief actually sought. The real significance of "or" is that distinct statutory alternatives should not be mechanically converted into cumulative components unless such aggregation follows from the language and scheme of the Rule itself.

"Or" Ordinarily Creates Alternatives - The Starting Point

The ordinary rule of statutory interpretation is that "or" is disjunctive. Where a statute or rule separates two situations by "or", they are normally alternatives. Courts do not ordinarily convert them into cumulative requirements by reading "or" as "and".

The classic authority is BABU MANMOHAN DAS SHAH & ORS. Versus BISHUN DAS - 1966 (10) TMI 149 - Supreme Court. The Supreme Court was considering Section 3(1)(c) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947, which referred to constructions that had materially altered the accommodation or were likely substantially to diminish its value.

The question was whether the two requirements separated by "or" were alternatives or whether both had to coexist. Rejecting a construction that would effectively turn "or" into "and", the Supreme Court stated:

"There is no reason why the word 'or' should be construed otherwise than in its ordinary meaning."

The Court explained that statutory language should ordinarily be given the meaning conveyed by the words actually used unless compelling reasons justify departure-for example, where the literal meaning would lead to absurdity or defeat the manifest legislative intention. The two limbs were therefore treated as alternatives rather than cumulative conditions.

The principle is important for Rule 110(5). If the rule-making authority has consciously used "or" between different monetary expressions, the starting presumption cannot be that those expressions should be read cumulatively.

"Or" Is Disjunctive and "And" Conjunctive - But There Is a Limited Exception

The principle was further explained in MUNICIPAL CORPORATION OF DELHI Versus. TEK CHAND BHATIA - 1979 (10) TMI 218 - Supreme Court.

The controversy arose under Section 2(i)(f) of the Prevention of Food Adulteration Act, 1954. Broadly stated, food could be regarded as adulterated if it contained filthy, putrid, rotten, decomposed, or diseased substances, or was insect-infested, "or is otherwise unfit for human consumption". The question was whether unfitness for human consumption had to be proved in addition, even where the food already fell within the preceding specified categories.

The Supreme Court rejected such a cumulative construction. It treated "or is otherwise unfit for human consumption" as a separate category and stated the governing principle:

"The word 'or' is normally disjunctive and 'and' is normally conjunctive, but at times they are read as vice versa."

The latter part of the statement is equally important. "Or" and "and" are not incapable of being interchanged. Courts may, exceptionally, do so where the context and manifest legislative intention make such a construction necessary. But that is an exception, not the ordinary rule. The Supreme Court cautioned against the interchange of the expressions without sufficient reason.

For Rule 110(5), therefore, the question is not whether "or" can ever be read cumulatively. It can, in an appropriate case. The real question is whether anything in the language, structure or object of Rule 110(5) provides sufficient reason for doing so.

Fiscal Provisions Are No Exception to the Ordinary Meaning of "Or"

The principle is even more relevant because the Supreme Court has applied it in indirect taxation.

In COMMISSIONER, CUSTOMS CENTRAL EXCISE AND SERVICE TAX, PATNA Versus M/s SHAPOORJI PALLONJI AND COMPANY PVT. LTD. & ORS. And UNION OF INDIA & ORS. Versus M/s SHAPOORJI PALLONJI AND COMPANY PVT. LTD. - 2023 (10) TMI 748 - Supreme Court, the Supreme Court considered the definition of "governmental authority" in a Service Tax exemption notification. Different parts of the definition were separated by "or", raising the question whether they were alternative or cumulative requirements.

The Supreme Court gave "or" its ordinary disjunctive meaning. It held that the use of "or" manifested an intention to prescribe alternatives and declined to convert the separate limbs into cumulative requirements.

This ruling is important for interpreting Rule 110(5). A fiscal setting does not, by itself, justify treating "or" as though the provision used "and". If cumulative operation was intended, the drafting of the provision would ordinarily be expected to convey that intention.

"Or" Creates Alternatives, Not Necessarily a Right of Choice

A recent Supreme Court judgment provides an important qualification and prevents the principle from being carried too far.

In Bikram Chand Rana v. Himachal Pradesh Road Transport Corporation, 2026 INSC 326, Civil Appeal No. 14669 of 2025, decided on 07.04.2026, the Supreme Court examined Rule 69(1)(c) of the Central Civil Services (Pension) Rules, 1972. The Rule prevented payment of gratuity until the conclusion of "departmental or judicial proceedings" and the issue of final orders.

The Supreme Court treated "or" in its ordinary disjunctive sense and relied upon Babu Manmohan Das Shah. However, because either departmental or judicial proceedings could independently attract the statutory bar, gratuity continued to be withheld if either category remained pending. The employee could not choose the alternative that produced the more favourable consequence.

This qualification is particularly useful in applying Rule 110(5). Disjunctive alternatives do not necessarily confer a right of election. The appellant cannot simply choose "tax", "ITC" or "penalty" according to whichever produces the lowest fee. The relevant alternative has to emerge from the nature of the appellate dispute.

The balanced principle is therefore this: "or" ordinarily keeps statutory alternatives separate; it does not necessarily make those alternatives optional at the choice of the person affected.

What Do the Four Supreme Court Decisions Collectively Establish?

Read together, the decisions establish three propositions. First, "or" ordinarily carries its natural disjunctive meaning and separates alternatives. Secondly, "or" may exceptionally be read as "and", but only where the statutory context, scheme, or clear legislative intention provides sufficient justification. Thirdly, treating statutory limbs as alternatives does not necessarily confer an unrestricted choice upon the person affected.

This framework fits Rule 110(5) particularly well. "Tax", "input tax credit involved", "difference in tax or input tax credit involved", and "fine, fee or penalty" cannot simply be treated as if the rule-making authority had joined them by "and". Equally, the appellant cannot arbitrarily select the smallest figure.

The correct approach is to examine the impugned order, identify what is actually being challenged, determine which statutory limb appropriately corresponds to that controversy, and then calculate the fee under Rule 110(5).

The Rule Itself Uses Both "Or" and "And" - The Difference Cannot Be Ignored

Rule 110(5) contains an important internal indication. While the monetary bases are repeatedly separated by "or", the same sentence thereafter provides that the fee is "subject to a maximum of twenty-five thousand rupees and a minimum of five thousand rupees".

Thus, both conjunctions have been consciously used in the same provision.

The distinction is meaningful. "Or" separates the different bases of computation, whereas "and" connects the two statutory parameters-the minimum and maximum-which govern the amount ultimately payable. Reading "or" as "and" in the earlier portion would dilute a linguistic distinction which the rule-making authority has itself maintained.

Interest Presents a Separate and Stronger Textual Question

The treatment of interest warrants separate attention. Interest does not appear in the main computational formula. The main part refers to tax, ITC, the difference in tax or ITC, fine, fee and penalty.

Yet the proviso expressly refers to an order not involving any demand of "tax, interest, fine, fee or penalty".

This difference is significant. The rule-making authority clearly knew how to refer to interest and expressly did so in the proviso. Its omission from the main computational formula therefore strongly indicates that interest was not intended to form part of the Rs. 1,000-per-Rs. 1 lakh base.

The two parts of the Rule can operate harmoniously. The existence of an interest demand may mean that the appeal cannot be regarded as one involving no monetary demand for purposes of the proviso. But that does not automatically establish that interest must be added to the amount on which the proportional fee under the main provision is calculated.

The Word "Involved" May Be as Important as the Word "Or"

Much of the interpretative debate naturally focuses on "or", but Rule 110(5) repeatedly uses another important expression-"involved".

The Rule refers to "tax or input tax credit involved" and "the difference in tax or input tax credit involved". It does not simply refer to every amount appearing in the adjudication order. The word suggests a nexus between the amount forming the fee base and the actual subject matter carried in appeal.

This becomes particularly relevant where an adjudication order determines a larger amount, but the appellant accepts a part of the demand and challenges only the balance. In such a case, the amount accepted and not carried in appeal stands on a different footing from the amount actually disputed before the Tribunal. The expression "involved" therefore supports a close connection between the computational base and the monetary controversy forming the subject matter of the appeal.

There is, however, an important textual distinction. For fine, fee or penalty, the Rule uses the expression "determined in the order appealed against". Therefore, "involved" cannot be detached from the remainder of the provision. In a mixed order, the computational base has to be determined by reading Rule 110(5) as a whole. Neither automatic aggregation by the Registry nor arbitrary selection by the appellant provides a substitute for that exercise.

A Fee Provision Should Not Be Enlarged Beyond the Words Used

Rule 110(5) imposes a monetary obligation related to filing or restoring an appeal. Its measure should therefore be found in the language the rule-making authority actually employed.

If interest were intended to be included in the proportional computational base, it could have been expressly included, as it has been in the proviso. Likewise, if all the monetary components were intended to be added together, Rule 110(5) could have used expressions such as "aggregate amount", "total amount" or "sum of" tax, ITC, fine, fee and penalty.

It does not do so. In the absence of such language, distinct expressions repeatedly separated by "or" should not ordinarily be transformed into one composite figure by effectively inserting "and", "aggregate" or "total" into the Rule.

Practical Application - Nine Illustrations

The following practical illustrations make Rule 110(5) easier to understand.

Illustration 1 - Appeal involving only tax: An order determines tax of Rs. 7 lakh, together with consequential interest, and the entire tax demand is challenged. Under this interpretation, the computational base is Rs. 7 lakh, and the appeal fee is Rs. 7,000. Consequential interest is not separately added because interest does not appear in the main computational formula.

Illustration 2 - ITC dispute: An order denies ITC of Rs. 15 lakh, together with interest and penalty, while the appeal challenges the denial of the entire ITC. The relevant base is the Rs. 15 lakh ITC involved, resulting in a fee of Rs. 15,000. ITC, interest and penalty should not automatically be added merely because they appear in the order. If the penalty is also independently challenged, however, its treatment under the separate penalty limb must be considered in the context of the precise appellate dispute.

Illustration 3 - Difference in tax involved: A taxpayer declares tax of Rs. 20 lakh, whereas the adjudicating authority determines Rs. 26 lakh. The appeal concerns only the additional Rs. 6 lakh. The expression "difference in tax ... involved" becomes directly relevant. The computational base would be Rs. 6 lakh, and the appeal fee Rs. 6,000. This illustrates the significance of the legislature separately referring to the "difference in tax".

Illustration 4 - Minimum fee: If the relevant amount involved in the appeal is Rs. 2 lakh, the rate-based calculation produces Rs. 2,000. Since Rule 110(5) prescribes a minimum fee of Rs. 5,000, the amount payable would be Rs. 5,000.

Illustration 5 - Maximum fee: If the relevant amount involved is Rs. 40 lakh, the rate-based calculation produces Rs. 40,000. The statutory ceiling applies, and the appeal fee would therefore be Rs. 25,000.

Illustration 6 - Penalty-only order: An order imposes a penalty of Rs. 13 lakh without determining tax or ITC and the entire penalty is challenged. The relevant limb is the "amount of ... penalty determined in the order appealed against". The appeal fee would be Rs. 13,000.

Illustration 7 - No monetary demand: Where the order does not involve any demand of tax, interest, fine, fee or penalty, the proportional formula does not apply in the ordinary manner. The proviso expressly fixes the appeal fee at Rs. 5,000.

Illustration 8 - Only part of the tax demand is disputed: An order determines tax of Rs. 30 lakh. The taxpayer accepts Rs. 20 lakh and challenges only the balance Rs. 10 lakh. Since Rs. 10 lakh is the tax or difference in tax actually involved in the appeal, the accepted Rs. 20 lakh should not be added merely because it formed part of the original order. The appeal fee would therefore be calculated on Rs. 10 lakh and would be Rs. 10,000.

Illustration 9 - ITC denial accompanied by penalty and interest: An order denies ITC of Rs. 10 lakh and imposes penalty of Rs. 1 lakh together with consequential interest. Both the ITC denial and penalty are challenged. Rule 110(5) separately refers to "input tax credit involved" and "the amount of ... penalty determined in the order appealed against", connecting them by "or" rather than "and"; interest is absent from the main formula altogether. On the interpretation of Rule 110(5) discussed above, the Rs. 10 lakh ITC would constitute the relevant computational base and the appeal fee would be Rs. 10,000. The Rs. 1 lakh penalty and consequential interest should not be mechanically added merely because they also appear in the impugned order.

These examples also demonstrate why Rule 110(5) cannot safely be applied through a single mechanical formula based upon the total financial consequence of the adjudication order. The nature of the dispute carried before the Tribunal remains central.

The Fee Must Follow the Dispute, Not the Aggregate Demand

Rule 110(5) should ultimately be applied by identifying the nature and amount of the monetary dispute actually involved in the appeal and then determining the relevant statutory limb. The repeated use of "or", read with "involved", weighs against mechanically clubbing different monetary components merely because they appear in the same order. At the same time, "or" does not give the appellant an unrestricted choice to select whichever component produces the lowest fee.

This interpretation is consistent with the Supreme Court jurisprudence on "or" and "and". It is also supported by the internal drafting of Rule 110(5): the Rule consciously uses both conjunctions, does not employ expressions such as "aggregate", "total" or "sum of", and mentions interest expressly in the proviso while omitting it from the main computational formula.

Accordingly, the fee should be calculated with reference to the relevant monetary component involved in the appeal at Rs. 1,000 for every Rs. 1 lakh, subject to the statutory minimum of Rs. 5,000 and maximum of Rs. 25,000. The sounder interpretation gives effect to the Rule as drafted and determines the applicable base from the subject matter of the appeal-neither by mechanical aggregation by the Registry nor by arbitrary selection by the appellant.

***