TaxTMI 
TaxTMI 
2026 (9) TMI 719
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....was issued demanding GST alongwith interest and penalties. Subsequently, the SCN was adjudicated, resulting in the OIO No. 09/2023-24-Central Tax (GVR) dated 11-12-2023. Aggrieved by the confirmation of demand amounts, the Respondent taxpayer, filed an appeal before the first appellate authority i.e. the Joint Commissioner (Appeals) who passed an OIA No. COC-GST-000-APP-543-2023-24 dated 13-5-2024 rejecting the appeals. The Respondent taxpayer further filed a rectification application alongwith further documents before the JC (Appeals), which was decided vide Rectification Order No. 11/2024-GST dated 13.12.2024 w.r.t. OIA dated 13-5-2024, wherein Rs. 1,18,889/- was dropped by allowing the appeals to that extent, and balance amount Rs. 4,23,345/- was allowed by way of remand, subject to verification of correctness of the tax amount by the original adjudicating authority. The Ld Jurisdictional Commissioner reviewed the Rectification Order and filed this appeal before us through the Authorised Person, on the grounds that the JC (Appeals) has no powers to remand the matter and had to mandatorily decide the appeals in terms of Section 107(11) of the CGST/KGST Act, 2017 and therefore the....
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....nd alone. 7.0 We find that out of the total demand of Rs. 5,42,234/-, the First Appellate Authority, i.e. JC (Appeals) has partially allowed the appeals for an amount of Rs. 1,18,889/- and partially remanded the matter to the adjudicating authority for the balance amount of Rs. 4,23,345/- to verify the tax amount and the documentary proof vide Rectification Order No. 11/2024-GST dated 13-12-2024. The operating part of the order of the JC (Appeals) is reproduced as below: I only partially allow the appeal viz., A.No.140/GST/CHN/ADC-JC/2023-24 dated 16.02.2024 filed by the Appellant and allow the rectification U/s. 161 of the CGST Act, 2017 to the extent discussed under Para 9 supra. Respondent shall accurately examine and verify the documentary proof produced by the Applicant and if found in order, delete the demands to the extent found to be no longer legally tenable. 8.0 We find that in respect of the remaining amount of demand of GST, i.e. Rs. 4,23,345/-, the JC (Appeals) has remanded the matter to the adjudicating authority, to accurately examine and verify the documentary proof produced by the taxpayer. The JC(Appeals) also granted the Respondent-Taxpayer, libert....
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....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 reasoning or points of determination as to why he himself cannot verify the documents and figures, by calling for records and figures, from both the parties before him, and to conclude with a reasoned order. 11.0 On a reading of Section 107 (11) ibid, we find that the appellate authority is empowered to cause inquiry, and after concluding such inquiry which he felt necessary, should have passed an order either, confirming, modifying or annulling the decision or order which is appealed against him, and it is also categorically mentioned that 'but shall not refer the case back to the adjudicating authority that passed the said decision or order'. We find that the statue allows the JC (Appeals) to conduct inquiry, call for documents, verify them and take a decision to either confirm the demand, drop the demand or modify the demand amounts, but in any case, the JC (Appeals) should not have ....
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....s 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, 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: Provided that 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: Provided further that 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 ....
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....irm 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 authority. Any doubt in that regard has been clarified by the legislature itself by stating that the appeal authority shall not refer the matter back to the adjudicating authority. 8. Accordingly, no other issue is required to be adjudicated 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. Learned counsel for respondents has not able to make any submission contrary to contents of above referred Clause (11) of Section 107 as well as 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 wr....
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....hich 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 to examine the place of provision of service in details with supporting documents. Needless to say that the procedure of natural justice must be followed before passing any order. 18. In view of the foregoing, all the 09 appeals as listed in para 1 of this order as has been filed by the Department are allowed by way of remand with the directions to the adjudicating authority to re-determine place of supply of service to qualify as the service of respondent as "export of Service as per the provisions of law after examination of the documents by calling from the respondent party." 6. While passing aforesaid direction, Joint Commissioner, CGST Appeals, NOIDA has not carefully perused the above referred sub-clause (11) of Section 107 of Act of 2017. 7. At this stage, Court also takes note that in earlier part of impugned order, probably there are findings in favou....
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.... 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 trite law that a show cause notice must clearly indicate the reasons in detail for proposing the adverse action in order to enable the noticee to respond to the same. Clearly, the impugned show cause notice does not meet this standard. Further, a show cause notice must set out the allegation in detail. Thus, I find that the impugned show cause notice and order, being without reasons in detail, is cryptic and deserves to be quashed and set aside. In this regard, I also find support from the pronouncement made in following cases:- (i) VIBHU BAKHRU AND AMIT MAHAJAN, JJ. CUTHBERT OCEANS LLP VERSUS SUPERINTENDENT OF CGST, ROHINI [W.P. (C) NO. 10421 OF 2023 AND C.M. APPL. NO. 40335 OF 2023, DECIDED ON 8-8-2023]: Held: Superintendent of CGST issued impugned show cause notice proposing to cancel petitioner's registration on ground that registration was obtained by means of fraud, wil....
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....he 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 consideration of the materials on record, the short question that falls for determination is whether the Appellate Authority, while exercising its powers under Section 107 of the said Act, is empowered to remand the matter to the Adjudicating Authority whose order was the subject matter of the appeal. Section 107(11) of the said Act reads as follows: "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 authority that passed the said decision or order: . . . 7. A plain reading of the aforesaid provision makes it abundantly clear that the Appellate Authority is empowered to pass such order as it deems just and proper by confirming, modifying, or annulling the de....
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....gned 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 of the matter to the Adjudicating Authority, is set aside. Consequently, the order dated September 16, 2025, rejecting the petitioners' application for rectification, is also set aside. 11. The matter is remitted to the Appellate Authority (respondent no. 3) for fresh consideration. The Appellate Authority shall decide the appeal afresh on the basis of the findings already recorded in the Order-in-Appeal dated May 20, 2024, and shall pass a reasoned order strictly in conformity with the mandate of Section 107(11) of the said Act, without remanding or otherwise referring the matter to the Adjudicating Authority. . . .. 15.0 We further find that the JC (Appeals) has not passed an order annulling, modifying or confirming the demands raised, and in appeal before him, but has proceeded to give certain directions to the adjudicating authority whose order is in appeals b....