GST APPEAL UNDER SECTION 107

Any person aggrieved by any decision or order passed under the Central Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an Adjudicating authority may appeal to such Appellate Authority.

Appellate Authority in case an appeal is filed against the order passed by the Additional/Join Commissioner would be - Commissioner (Appeals).

Similarly, Appellate Authority in case an appeal is filed against the order passed by an Assistant/Deputy  Commissioner would be – Joint Commissioner (Appeals).

At this juncture, it is relevant to understand that no appeal shall lie against the following orders-

(a) an order of the Commissioner or other authority empowered to direct transfer of proceedings from one officer to another officer; or

(b) an order pertaining to the seizure or retention of books of account, register and other documents; or

(c) an order sanctioning prosecution under this Act; or

(d) an order passed under section 80.

(Section 121)

The appeal before the Appellate Authority has to be made within 3 months from the date of communication of the decision or order of the Adjudicating authority. However, the Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months, allow it to be presented within a further period of one month. Thereby taking the maximum period within which an appeal can be filed before the first Appellate Authority as four months.

The appeal before an Appellate Authority has to be made in form APL-01 now available electronically. On successful submission of form APL-01, a provisional acknowledgement shall be issued to the appellant immediately. Now if-

1. The decision or order appealed against has been uploaded on the Common portal, a final acknowledgement, indicating the appeal number, shall be issued in FORM GST APL-02 by the Appellate Authority or an officer authorised by him on this behalf and the date of issue of the provisional acknowledgement shall be considered as the date of filing of appeal and not the date of issue of final acknowledgement.

2. Where the decision or order appealed against is not uploaded on the Common portal, the appellant shall submit a self-certified copy of the said decision or order within a period of seven days from the date of filing of FORM GST APL-01 and a final acknowledgement, indicating the appeal number, shall be issued in FORM GST APL-02 by the Appellate Authority or an officer authorised by him in this behalf, and the date of issue of the provisional acknowledgement shall be considered as the date of filing of appeal.

3. Where the decision or order appealed against is not uploaded on the Common portal, where the said self-certified copy of the decision or order is not submitted within a period of seven days from the date of filing of FORM GST APL-01, the date of submission of such copy shall be considered as the date of filing of appeal. 

(CGST Rules, 2017- Rule 108)

Pre-deposit under GST is a precondition to filing an appeal. In addition to the admitted amount of tax, interest and penalty, a pre-deposit on the disputed amount of tax (not interest and penalty except in case b) is to be paid at the time of filling of an appeal-

1. A sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, (subject to a maximum of twenty-five crore rupees,) in relation to which the appeal has been filed.

2. In case of an order under section 129(3), a sum equal to twenty-five per cent. of the penalty.

Now the question that arises is whether pre-deposit can be made out of credit ledger or it has to be made exclusively out of cash ledger. CBIC came out with a Circular No. 172/04/2022-GST wherein it has been stated that- “it is clarified that any payment towards Output tax, whether self-assessed in the return or payable as a consequence of any proceeding instituted under the provisions of GST Laws, can be made by utilization of the amount available in the Electronic credit ledger of a Registered person.” Though the circular does not explicitly mention that the pre-deposit amount can be paid out of Electronic credit ledger but Bombay High Court in the case of Oasis Realty, Roma Builders Pvt Ltd. and Macrotech Developers Limited [2022] 52 TAXLOK.COM 073 (Bombay) has held that-

“Therefore, CBIT&C has itself clarified that any amount towards Output tax payable, as a consequence of any proceeding instituted under the provisions of GST Laws, can be paid by utilisation of the amount available in the Electronic credit ledger of a Registered person. The CBIT&C has also requested that suitable trade notices be issued to publicize the contents of the circular.”

General points-

1. Appellate Authority may, if sufficient cause is shown at any stage of the hearing of an appeal, grant time and adjourn the hearing of the appeal for reasons to be recorded in writing. However, no such adjournment shall be granted more than three times to a party during the hearing of the appeal.

2. Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable.

3. Appellate Authority can pass an order confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority.

4. Appellate Authority also has the power to enhance the liability or reduce the quantum of refund if he deems so, but only after the appellant has been given a reasonable opportunity of being heard and 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 the notice to show cause against the proposed order and the order is passed within the time limit specified under section 73 or section 74.

5. Appellate Authority may dispose of the appeal within a period of one year from the date of filing of an appeal if it is possible to do so. Appellate Authority is not bound to pass its order within the said time.