Appeal to Appellate Authority Under GST (1st Appeal): A Comprehensive Manual

Appeal to First Appellate Authority Under GST: A Complete Manual

Appeal under GST: In the realm of tax law, it’s acknowledged that diverse perspectives may emerge based on the same set of facts and laws. Consequently, there is a likelihood that a taxpayer might not concur with the “adjudication order” issued by the tax officer. Accordingly, an individual who feels aggrieved by a decision or order from an adjudicating authority has the right to file an appeal with the Appellate Authority.

The Act specifies that if an order is issued by the proper officer under a particular Act, such as CGST, any subsequent appeal, review, revision, or rectification must be pursued exclusively through the proper officers of that specific Act (CGST Act). Similarly, if an order originates from the proper officer of SGST, any appeals or related processes must be directed to the proper officer of SGST.

Assessment Demand Orders appealable by Taxpayers

• Assessment order under section 62
• Assessment order under section 63
• Assessment order under section 64
• Acceptance or Rejection of application filed under section 64 (2)
• Withdrawal of Assessment order issued under section 64
• Order under section 125 imposing penalty
• Order under section 122, 125, 127 for dropping the penalty proceedings
• Order against remanded cases (DRC-07 also in case of remand under section-73/74/76)
• Assessment Order for the proceedings under section 73/74 /76 plus Summary of the order
• Order for dropping the proceedings under section 73/74
• Rectification of Order
• Order of rejection of application for rectification
• Order for dropping proceedings U/s 63

Enforcement Orders appealable by Taxpayers

• Order of Demand of Tax and Penalty
• Order of Confiscation of Goods and Conveyance and Demand of Tax, Fine and Penalty for proceeding under section 129
• Order of Confiscation of Goods and Conveyance and Demand of Tax, Fine and Penalty for proceeding under section 129
• Order of Rectification/modification in DRC-08 for MOV-09/11
• Order of Rectification/modification in DRC-08 for MOV-09/11

Non-Appealable Orders

• An order of the Commissioner or other authority empowered to direct transfer of proceedings from one officer to another officer;
• An order pertaining to the seizure or retention of books of account, register and other documents;
• An order sanctioning prosecution under the Act;
• An order passed under section 80 (payment of tax in instalments).

Time Limit for Filing Appeal

When it comes to filing an appeal, it’s crucial to be mindful of the time constraints. The appellant has a window of 3 months from the date of receiving the impugned order to submit their appeal to the Appellate Authority. However, there’s a bit of flexibility in case circumstances warrant it. The Appellate Authority (AA) has the discretion to condone a delay of up to one month if satisfied that there was a valid and justifiable reason for the delay.

Pre-Deposit for Filing Appeal

In adherence to Section 110 (6) of the CGST Act, 2017, appellants approaching the Appellate Authority (AA) must fulfill a pre-deposit requirement. This entails depositing the entire amount of tax, interest, fine, fee, and penalty acknowledged by the appellant in relation to the contested order. Additionally, a sum equivalent to 10% of the remaining disputed tax amount (up to a maximum of 50 crores) from the impugned order is required. It’s important to note that there’s no obligation to deposit a percentage of disputed interest, fine, fees, or penalty.

In the event that the pre-deposit made by the appellant is to be refunded following an AA order, interest at the rate specified in Section 56 becomes applicable. This interest accrues from the date of payment of the amount (not from the AA order date) until the actual date of refund.

Process of Appeal

Initiating an appeal to the Appellate Authority under section 107(1) of the Act involves a systematic process outlined for ease and efficiency. To file an appeal, use FORM GST APL-01, which can be submitted either electronically or through alternative means as notified by the Commissioner. Upon submission, the appellant receives a provisional acknowledgement promptly.

Subsequently, a hard copy of the appeal in FORM GST APL-01, submitted in triplicate, along with a certified copy of the appealed decision or order and supporting documents, must reach the Appellate Authority within seven days of filing the appeal under sub-rule (1). Following this, a final acknowledgement denoting the appeal number is issued in FORM GST APL-02 by the Appellate Authority or an authorized officer.

It’s important to note that, if the hard copy of the appeal and associated documents are submitted within seven days from the FORM GST APL-01 filing date, the appeal’s filing date corresponds to the provisional acknowledgement issue date. However, if the hard copy is submitted after seven days, the filing date aligns with the document submission date. The appeal is officially considered filed only upon the issuance of the final acknowledgement, featuring the assigned appeal number.

Production of Additional Evidence

The presentation of additional evidence before the Appellate Authority is subject to specific conditions outlined for a fair and transparent process. The appellant is generally restricted from introducing new evidence, whether oral or documentary, beyond what was presented during the adjudicating authority proceedings. However, exceptions arise in below circumstances:

(a) where the adjudicating authority has refused to admit evidence, which ought to have been admitted; or

(b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the adjudicating authority; or

(c) where the appellant was prevented by sufficient cause from producing before the adjudicating authority any evidence which is relevant to any ground of appeal; or

(d) where the adjudicating authority has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.

Any evidence admitted under these circumstances requires written documentation of the reasons for its acceptance by the Appellate Authority. Importantly, the Appellate Authority cannot consider evidence introduced unless the adjudicating authority or a designated officer has had a reasonable chance to review, examine, or cross-examine witnesses.

Moreover, this rule doesn’t impede the Appellate Authority’s authority to instruct the submission of documents or the examination of witnesses to ensure a comprehensive resolution of the appeal. This structured approach ensures that additional evidence is introduced under specific conditions, maintaining the integrity and fairness of the appeals process.

Order of the Appellate Authority

Upon reaching a decision under section 107(11) of the Act, the Appellate Authority (AA) not only issues an order but also provides a concise summary in FORM GST APL-04, clearly specifying the final confirmed demand amount. The AA shall communicate its decision to the appellant and the adjudicating authority. A copy of the same shall also be sent to the jurisdictional commissioners of CGST and SGST.

Prior to finalizing the order, the AA adheres to principles of natural justice, ensuring a fair process that includes hearing the appellant, allowing reasonable adjournments (limited to three), and considering additional grounds if deemed reasonable. The AA is empowered to conduct further inquiries as necessary.

Upon concluding the appeal process, the AA issues an order that may either confirm, modify, or annul the appealed decision or order. Importantly, the case is not referred back to the original authority. The AA can enhance penalties, fines, or modify orders, but only after affording the appellant a reasonable opportunity to present their case.

If the AA believes that taxes are unpaid, short-paid, erroneously refunded, or if there are issues with input tax credit, an order requiring payment is not passed without first notifying the appellant, providing an opportunity to show cause. Any such order must be issued within the time limit specified under section 73 or Section 74 of the CGST Act, 2017.

The Order-in-appeal is required to be a “speaking order,” meaning it should articulate the points for determination, the decision reached, and the reasoning behind it. The law provides an advisory time limit of 1 year from date of filing of appeal for the AA to decide the appeal.

Qualification & Disqualification of Authorized Representative

In dealings with proceedings under the Act, any individual required to participate before the Appellate Authority (AA) has the option to be represented by an authorized representative, excluding situations where personal appearance is mandatory for examination on oath or affirmation as specified by the Act.

The Act itself defines an “authorized representative,” encompassing relatives, regular employees, advocates, chartered accountants, cost accountants, company secretaries, or individuals possessing prescribed qualifications. Notably, retired indirect tax gazetted officers can serve as authorized representatives one-year post-retirement.

Despite these provisions, the GST law outlines certain disqualifications for authorized representatives, including dismissal from government service, conviction under specific Acts, insolvency, and instances of misconduct. Importantly, any disqualification orders must adhere to the principles of natural justice.

If an authorized representative, excluding those mentioned in clause (b) or Clause (c) of section 116(2), is found guilty of misconduct in connection with proceedings under the Act, the Commissioner has the authority, following a fair opportunity for a hearing, to disqualify them from acting as an authorized representative. This ensures a balance between the rights of the individuals involved and the need for ethical and lawful representation in the course of GST proceedings.

To Read the Appeal Rules published by CBIC, find the PDF HERE

To Read the Guide on Annual Return under GST CLICK HERE

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