TaxTMI 
TaxTMI 
2026 (9) TMI 721
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....culminated into a Show Cause Notice No. 02/2023 dated 21-3-2023. The SCN was adjudicated vide OIO No. 02/2023-24-GST dated 29-11-2023 and a corrigendum dated 11-12-2023 confirming the demand amount along with interest and penalty. Aggrieved by the said order, the taxpayer filed an appeal before the JC (Appeals). The JC (Appeals), partially dropped the demand amounts, and also referred the matter back to the Adjudicating authority for verification of figures and documents and to pass a fresh order. Hence this appeals. 4.0 Ld Deputy Commissioner appearing as AR for the respondent, submits that the JC (Appeals) has violated Section 107(11) of the CGST Act, 2017 and Rule 113(1) of the CGST Rules, 2017. He submits that the JC (Appeals) unlawfully sent back the case to the Adjudicating Authority to verify tax calculation and the documentary proof produced by the respondent and if found order, delete the demands. He submits that the JC (Appeals) has no power to remand under Section 107(11) of the CGST Act, 2017 and prays that the appeals be allowed by setting aside the impugned Order-in-Appeal dated 9-10-2024, and send it back to the JC (Appeals) with a direction to complete the verifi....
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....in-Appeal was reviewed by the Principal Commissioner of CGST & CE, Kochi, and authorised the Deputy/Assistant Commissioner of CGST & CE, to file Appeal against the said Order in Appeal. 8.0 We also find it important to read into the operating part of the order of the JC (Appeals) is reproduced as below: (1) I partially allow the appeal A.No.84/GST/CIIN/ADC-JC/2023-24 dated 10.01.2024 filed by Appellant viz., Shri. Soji, Peechattu Glass World, Ground Floor, I/10,11,12, Kothamangalam Main Road, Kuttkuzhi, Kothamangalam, Emakulam-686691 [GSTIN: 32EBMPS2590LIZ2]. Further, I modify the operative portion of the Order at Sl. Nos. (i), (iii), (iv) and (viii) of the Order-in-Original dated 29.11.2023 passed by the Respondent deleting the demand to the tune of Rs.2,93,300/- {IGST} along with applicable interest and proportionate penalty as imposed. Appellant is directed to submit relevant documentary proof in support of the workings/reconciliation provided in Table at Para 8 supra for the remaining Rs.4,07,262/- {IGST} and material evidence, invoices etc. in support, of his claims on TRAN-1 Credit of Rs 6,05,502/- IGST. Respondent shall verify the details/relied-upon documents pr....
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....t 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 4[or section 74A]. (12) 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. 11.0 We find that as per the Section 107(10), of the CGST/KGST, the JC (Appeals) was within his rights at the time of hearing an appeal, to allow an appellant to add any additional ground of appeal, and the additional documents were allowed to be furnished. But, instead of himself getting it verified, the Appellate Authority proceed to pass an order directing the original adjudicating authority to verify and if found correct, the demand may be deleted, or otherwise, the demand to be confirmed once again. The JC (Appeals) has not given any re....
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.... the authority that passed the decision or order under appeal. Thus, the statute contemplates only three courses of action available to the Appellate Authority, namely, to confirm, modify, or annul the impugned decision or order. Where necessary, the Appellate Authority may undertake or cause to be undertaken such further inquiry as it considers necessary and thereafter adjudicate the matter on its own merits. The power to remand has been expressly excluded by the legislature. 15.0 We find that various Hon'ble High Courts have dealt with this issue which we wish to discuss as below: (i) In the case of Kronos Solutions India Private Limited Versus Union Of India cited in 2024 (2) TMI 135 - ALLAHABAD HIGH COURT, Hon'ble High Court has held that, 3. Solitary submission advanced by the learned counsel for the petitioner is, the above order at least operative portion has been passed in defiance to the provisions of Section 107(11) of CGST Act, 2017. For ready reference, that provision of law reads as below:- "11. The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, m....
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....at this stage. Once the appeal authority is seen to have failed to exercise its jurisdiction in accordance with law, such an order may never be sustained. It is accordingly set aside and the matter is remanded to the appeal authority to pass a fresh order after hearing the parties afresh. 9. The writ petition stands allowed. (ii) In the case of Anand and Anand (Law Firm) Versus The Principal Commissioner Central Goods & Services Tax cited in 2026 (2) TMI 956 - ALLAHABAD HIGH COURT, the Hon'ble High Court has held that, 8. Learned counsel for petitioner has also relied upon a judgment passed by Division Bench of this Court in Kronos Solutions India (P.) Ltd. v. UOI, 2024:AHC:16550-DB wherein similar issue was considered in following manner. For reference, relevant paragraphs of it are quoted below :- "7. Undeniably, the appeal authority may either confirm or modify or annul the order under appeal. In face of statutory prescription allowing for only three above described options to the appeal authority, no inherent power may remain be exercised by the appeal authority to set aside the order under appeal and remand the proceedings to the original au....
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....g authority are set aside. (b) The writ petition is disposed of with an observation to the Joint Commissioner, CGST (Appeals), Noida to decide the appeal in accordance with law within a period of two months. 17. With the aforesaid observations, the Leading, connected C1, connected C2 and connected C3 writ petitions stand disposed of. (iii) In the case of Anand and Anand (Law Firm) Versus Principal Commissioner CGST cited in 2025 (9) TMI 468 - ALLAHABAD HIGH COURT, the Hon'ble High Court has held that, 4. From plain reading of aforesaid Section as well as its Clause, there is a mandatory bar for the Appellate Authority that cases shall not be remitted back to Adjudicating Authority who has passed the said decision or order. 5. In the light of aforesaid provision, Court also takes note of paragraph 17 and 18 of impugned order dated 27.09.2023 which are quoted below :- "17. However, I find that in the instant case the respondent party has not produced any conclusive evidence viz. any agreement etc., therefore in absence of any such evidence available on record, it be appropriate to remand the case back to the adjudicating authority....
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....well as M/s Kronos Solutions (supra). 10. In aforesaid circumstances, latter part of impugned order dated 27.09.2023 whereby matter has been remitted back to Adjudicating Authority is set aside and this writ petition is disposed of with an observation that Joint Commissioner, CGST Appeals, NOIDA shall decide the appeals filed in accordance with law. 11. The present writ petition is entertained against the order passed in Appeal directly since GST Tribunal which is still not functioning. 12. Writ petition stands disposed of with above observations and directions. (iv) In the case of Kanha Shree Steels Versus Assistant Deputy Commissioner of CGST cited in 2025 (8) TMI 1060 - ALLAHABAD HIGH COURT, the Hon'ble High Court has held that, After hearing learned counsel for the parties, the Court has perused the record. It is nobody's case that by the impugned order, the authority has come to the conclusion that neither show cause notice, nor the order specify the conditions as required or any reason in detail has been given. The relevant part of the impugned order dated 28.03.2025 is quoted below: "5.7. I find that, it is t....
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....s not empower the appellate authority to pass an order giving a second inning to the Revenue. Sub-section (11) of section 107 of the GST Act, provides that 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. In view of the above, part of the impugned order dated 28.03.2025 is set aside to the extent it remands the matter to the Assistant/Deputy Commissioner for verification of facts relating to the petitioner. Consequently, the impugned order dated 01.05.2025 is set aside. It is further provided that the respondents shall be at liberty to act in accordance with law for taking fresh course of action, if available under the law. The writ petition succeeds and is allowed. (v) In the case of Shyam Traders Versus State of West Bengal cited in (2026) 44 Centax 262 (Cal.), the Hon'ble High Court has held that, "6. Having heard the learned advocates appearing for the respective parties and upon ....
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....the statutory appellate remedy, does not merit acceptance. The defect in the Order-in-Appeal is not one relating to appreciation of evidence or determination of the merits of the controversy. Rather, it arises from the Appellate Authority having exercised a jurisdiction that the statute expressly withholds. A direction of remand issued in the face of the prohibition contained in Section 107(11) of the said Act is wholly without jurisdiction and is, consequently, a nullity in the eye of law. Such a jurisdictional infirmity cannot be cured, nor can the illegality be rendered immune from judicial scrutiny, merely because an application for rectification came to be rejected on the ground of limitation. It is well settled that the existence of an alternative statutory remedy does not constitute an absolute bar to the exercise of the writ jurisdiction of this Court, particularly where the impugned action is ex facie without jurisdiction or in patent violation of an express statutory provision. The submission advanced on behalf of the Revenue is, accordingly, rejected. 10. Accordingly, the operative portion of the Order-in-Appeal dated May 20, 2024, insofar as it directs remand o....
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....ce to the adjudicating authority. Sub-section (11) of section 107 of the GST Act, provides that First 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 impugned order is therefore, rendered void, illegal and beyond jurisdiction, and is liable to be set aside. 19.0 Accordingly, in view of the above, we conclude that: (i) The JC (Appeals) has no power to remand the matter to the original adjudicating authority under Section 107(11) of the CGST / KGST Act, 2017, giving directions for verification of the documents / evidences submitted before him, and further giving direction to delete the demand if found in order. (ii) The Order passed by the JC (Appeals) without any final conclusion and issuing directions to the adjudicating authority amounts to referring the matter back and giving a second chance to the original authority, which is not allowed under Section 107(11) has therefore such an order is not tenabl....