TaxTMI 
TaxTMI 
2026 (9) TMI 1477
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.... the provisions governing the movement of goods and the requirement of an e-way bill. Against OIO Appeal was filed begore first appellate authority under Appeal No. 146/2025 (Appeal No. GST-AD090425011335C/25, Year 2024-25) which was allowed under Section 129(3) of the UPGST Act, 2017. The learned Authorised Representative appearing for the Revenue has urged that the appeal deserves to be admitted and heard on merits. He has also explained the nature of the dispute, the grounds on which the order of the First Appellate Authority is assailed and the reasons stated by the Department for considering the said order erroneous. We have heard the learned Authorised Representative and have carefully examined the appeal memorandum, the impugned order and the material placed on record. At the outset, however, we make it clear that the stage of admission cannot be treated as a mere procedural formality. The Tribunal is required to first satisfy itself that the appeal is legally maintainable and is entitled to enter the stage of adjudication on merits. A distinction must necessarily be maintained between filing of an appeal and maintainability of an appeal. The mere fact that an appeal h....
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....ng monetary limits for regulating the filing of appeals or applications by State Tax officers. Pursuant thereto, the Commissioner, State Tax, Uttar Pradesh issued Circular No. 2425008 dated 05.07.2024, prescribing, inter alia, a monetary limit of Rs. 20,00,000 for departmental appeals before GSTAT, subject to specified exclusions and exceptions. The circular expressly seeks to reduce Government litigation and promote prudent utilisation of judicial resources. Thus, the monetary-threshold policy cannot be regarded as an obsolete or abandoned administrative arrangement. State litigation-management framework continued through its Circular No. 252/2026-27/State Tax dated 22.05.2026, dealing with monetary limits, review mechanism and departmental litigation before GSTAT and higher constitutional courts. 3. Issues for Determination In view of the above, the following issues arise for determination at this stage: • Whether the prescribed monetary limit of Rs. 20,00,000 is applicable to the present departmental appeal? • Whether, on application of the methodology prescribed by the competent authority, the disputed amount in the present appeal falls below ....
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....nterest/penalty/late fee, as the case may be, in respect of which appeal or application is contemplated to be filed in a case. viii. In a composite order which disposes more than one appeal/demand notice, the monetary limits shall be applicable on the total amount of tax/interest/penalty/late fee, as the case may be, and not on the amount involved in individual appeal or demand notice. Hence if, after applying the prescribed methodology, the disputed amount is below Rs. 20 lakh, the appeal falls within the monetary restriction unless a recognised exception is established. In the present case, upon examination of case record we find that there is dispute regarding a penalty of Rs. 88,074/. Thus, the amount in dispute is admittedly/clearly below Rs. 20,00,000. The first threshold condition is, therefore, attracted. 5. Exceptions to the Monetary Limit. :--- The fact that an appeal falls below the prescribed monetary limit does not conclude the matter. The circular itself recognises specified exceptions. At this stage clause 4 which deals with EXCLUSIONS are important for deliberation and examination. As per clause 4 Monetary limits specified for filing appeal or applicatio....
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....demonstrating that the statutory discretion was actually exercised in the particular case. The Department cannot be permitted to leave these matters to inference. A monetary-limit regime would become wholly ineffective if every appeal below the prescribed threshold could be instituted merely by making a bald statement that it has been filed "with the permission of the Commissioner. 7. Permission is Not the Same as Statutory Compliance. This distinction, in our considered view, is fundamental. Administrative authorisation to institute litigation and satisfaction of the statutory conditions governing maintainability are two different matters. An officer may require administrative permission to institute an appeal but such permission, by itself, does not demonstrate that the particular appeal falls within a recognised exception to the monetary restriction. In other words: An authorisation to file an appeal is not, by itself, an authorisation to disregard the monetary limit. If the Department relies upon the residual exception relating to the Commissioner's opinion that a particular matter requires contest in the interest of justice or revenue, the record must disclose that t....
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....le is one of institutional discipline. A litigation policy framed by the competent authority for regulating departmental appeals cannot be treated as binding when it favours the Department and merely advisory when it operates as a restraint upon the Department. The State, as a litigant, is expected to conduct litigation responsibly and consistently with its declared policy. Hon'ble Supreme Court in Director of Income Tax v. S.R.M.B. Dairy Farming (P) Ltd. also recognised the problem of governmental over-litigation and the need for responsible litigation policy to prevent docket explosion and unnecessary multi-tier litigation. 9. Binding Character of Departmental circular. The Department cannot simultaneously invoke a statutory litigation-control mechanism when convenient and disregard the same mechanism when an adverse order is passed. It has been held by the Hon'ble Apex court in M/S. Ranadey Micronutrients vs Collector Of Central Excise (1996) 10 SCC 387 that it does not lie in the mouth of the Revenue to repudiate a circular issued by the Board on the basis that it is inconsistent with a statutory provision. Consistency and discipline are of far greater importance than the....
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....evenue has failed to establish that this matter falls under an exception. 11. Impact of monetary limit. The right of appeal is a statutory right and has to be exercised in the manner prescribed by the statute.. It has repeatedly held that a right of appeal is not an inherent or natural right. In State of Maharashtra v. Greatship (India) Ltd. Hon'ble Supreme Court reiterated the principle that an appeal is a creature of statute and that its exercise must remain within the statutory framework. The Department has such right of appeal as the statute confers, subject to the conditions and regulatory provisions contained in the statutory scheme. A recent decision in Commissioner of Commercial Tax v. Vikram Cement, decided 5 February 2026, considered the Rs. 20 lakh GST monetary limit and it has been held by the Hon'ble Apex court that the circular applied even to pending appeals. The Court treated the monetary-limit instruction as a bar to pursuing the departmental appeal and dismissed the appeals where the tax component was below the prescribed limit, while leaving the legal question open for an appropriate case. It has been held by the Hon'ble Apex court in DIRECTOR OF INCOME TAX, v....
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....tled to enter the adjudicatory process. The correct sequence is the reverse: Maintainability first; merits thereafter. Where the statutory and administrative framework places a threshold condition upon departmental litigation, the Tribunal must examine that condition at the threshold. The merits of an appeal cannot create maintainability where the conditions precedent for its admission have not been fulfilled. Nor can the existence of an arguable question on merits, by itself, neutralise a binding monetary-limit policy. 13. Public Interest and Responsible Litigation The monetary threshold should not be misunderstood as a declaration that a demand below Rs. 20 lakh is legally insignificant. It is a policy determination concerning allocation of public resources, litigation discipline and prioritisation of revenue disputes. Government litigation consumes: • judicial time; • departmental resources; • public money; • time of officers; • time of taxpayers; • and institutional capacity of the Tribunal. • The object of a monetary-limit policy is therefore not merely to reduce the number of case....