Appeals and Revision – CA Final IDT Study Material is designed strictly as per the latest syllabus and exam pattern.
Appeals and Revision – CA Final IDT Study Material
Question 1.
Pursuant to audit conducted by the tax authorities under section 65 of the CGST Act, 2017, a show cause notice was issued to Home Furnishers, Surat, a registered supplier, alleging that it had wrongly availed the input tax credit without actual receipt of goods for the month of July, 20XX. In the absence of a satisfactory reply from Home Furnishers, Joint Commissioner of Central Tax passed an adjudication order dated 20.08.20XX (received by Home Furnishers on 22.08.20XX) confirming a tax demand of ₹ 50,00,000 and imposing a penalty of equal amount under section 122 of the CGST Act, 2017.
Home Furnishers does not agree with the order passed by the Joint Commissioner. It decides to file an appeal with the Appellate Authority against the said adjudication order. It has ap-proached you for seeking advice on the following issues in this regard:
(1) Can Home Furnishers file an appeal to Appellate Authority against the adjudication order
passed by the Joint Commissioner of Central Tax? If yes, till what date can the appeal be filed? [2 Marks]
(2) Does Home Furnishers need to approach both the Central and State Appellate Authorities
for exercising its right of appeal? [(2 Marks)]
(3) Home Furnishers is of the view that there is no requirement of paying pre-deposit of any kind before filing an appeal with the Appellate Authority. Give your opinion on the issue.
[(2 Marks)] [MTP, May 19
Answer:
Statutory Provision
(1) As per Section 107( 1) of the CGST Act:- An appeal against a decision/order passed by any adjudicating authority under the CGST Act or SGST Act/UTGST Act is appealable before the Appellate Authority. Thus, Home Furnishers can file an appeal to Appellate Authority against the adjudication order passed by the Joint Commissioner of Central Tax.
Time Limit for filing Appeal: – Appeal can be filed within 3 months from the date of communication of such decision/order.
(2) GST law makes provisions for cross empow-erment between CGST and SGST/UTGST officers so as to ensure that if a proper officer of one Act (say CGST) passes an order with respect to a transaction, he will also act as the proper officer of SGST for the same transaction and issue the order with respect to the CGST as well as the SGST/ UTGST component of the same transaction.
The law further provides that where a proper officer under one Act (say CGST) has passed an order, any appeal/review/ revision/rectification against the said order will lie only with the proper officers of that Act only (CGST Act). Similarly, if any order is passed by the proper officer of SGST, an appeal/review/revision/rectification will lie with the proper officer of SGST only.
(3) Section 107(6) of the CGST Act provides that no appeal shall be filed before the Appellate Authority, unless the appellant has paid—
(a) full amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and
(b) a sum equal to 10% of the remaining amount of tax in dispute arising from the impugned order.
In the given case
(1) Home Furnishers can file the appeal to Ap-pellate Authority on or before 22.11.20XX. Further, the Appellate Authority can also condone the delay in filing of appeal by 1 month if it is satisfied that there was sufficient cause for such delay [Section 107(4)].
(2) Home Furnishers is required to file an appeal only with the Central Tax Appellate Authority [Section 6 of CGST Act],
(3) Home Furnishers’ view is not correct in law.
Home Furnishers disagrees with the entire tax demanded, it has to make a pre-deposit of 10% of the amount of tax in dispute arising from the impugned order, i.e., 10% of ₹ 50,00,000 which is ₹ 5,00,000.
Question 2.
The original adjudicating authority confirmed a demand of GST of ₹ 42,50,000 with interest and imposed a penalty of ₹ 4,25,000 in its order dated 1st September, 2019. The assessee filed an appeal before appellate authority challenging the demand as well as penalty. The internal audit party, after an audit of the records of the assessee, submitted a note to the Commissioner that actual amount demanded should have been ₹ 48,50,000.
While the issue was pending before the appellate authority, based on the note, the Commissioner stayed the order of the original authority and issued a show cause notice on 14th March, 2020, proposing revision of the order of the original authority and revise the demand on the basis of the audit note. Examine the correctness of the action taken by the Commissioner in accordance with the provisions of GST law.
Answer:
Statutory Provision
As per section 108 of the CGST Act, 2017 :- Revisional Authority cannot revise an order if, inter alla, such order has been subject to an appeal before Appellate Authority or Tribunal or High Court or Supreme Court.
The Revisional Authority may, however, pass an order on any point which has not been raised and decided in an appeal before Appellate Authority/Tribunal/High Court/Supreme Court.
In the given case
The Commissioner wants to revise the order on the point which is the subject matter in the appeal [Note].
Therefore, the Commissioner cannot exercise the power of revision in respect of such order.
Note : It has been logically assumed that the revision is on the point which is the subject matter in appeal in the absence of the specific mention of the issue involved.
Question 3.
With reference to section 108 of the CGST Act, 2017, elaborate whether a CGST/SGST authority can revise an order passed by his subordinates. [RTP, Nov. 18]
Answer:
Section 108 of the CGST Act, 2017 authorizes such “Revisional Authority” to call for and examine any order passed by his subordinates and in case he considers the order of the lower authority to be erroneous in so far as it is prejudicial to revenue and is illegal or improper or has not taken into account certain material facts, whether available at the time of issuance of the said order or not or in consequence of an observation by the Comptroller and Auditor General of India, he may, if necessary, can revise the order after giving opportunity of being heard to the noticee. The “revisional authority” can also stay the operation of any order passed by his subordinates pending such revision.
The “revisional authority” SHALL NOT REVISE any order if-
(a) the order has been subject to an appeal under section 107 or under section 112 or under section 117 or under section 118; or
(b) the period specified under section 107(2) has not yet expired or more than three years have expired after the passing of the decision or order sought to be revised.
(c) the order has already been taken up for revision under this section at any earlier stage.
(d) the order is a revisional order.
Question 4.
Rule 112 of the CGST Rules lays down that the appellant shall not be allowed to produce before the Appellate Authority (AA) or the Tribunal any evidence, whether oral or documentary, other than the evidence produced by him during the course of the proceedings before the adjudicating authority or, as the case may be, the AA.
What are the exceptional circumstances specified in the rule where the production of additional evidence will be allowed? Can AA or the Tribunal direct production of any document or examination of any witness? [Nov. 2018, 5 Marks]
Answer:
Exceptional circumstances specified in Rule 112 of the CGST Rules, 2017 where the production of additional evidence will be allowed are as follows:
(a) where the adjudicating authority/appellate authority (AA) has refused to admit evidence, which ought to have been admitted.
(b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the adjudicating authority/AA.
(c) where the appellant was prevented by sufficient cause from producing before the adjudicating authority/AA any evidence which is relevant to any ground of appeal; or
(d) where adjudicating authority/AA has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.
Yes, the AA or the Tribunal can direct the production of any document or examination of any witness to enable it to dispose of the appeal.
Question 5.
The Appellate Tribunal has the discretion to refuse to admit any appeal. Examine the correctness of the above statement
Answer:
The statement is partially correct.
Though the Appellate Tribunal does have the power to refuse to admit an appeal, it cannot refuse to admit ANY appeal. It can refuse to admit an appeal where –
- the tax or input tax credit involved or
- the difference in tax or the difference in input tax credit involved or
- the amount of fine, fees or penalty determined by such order, does not exceed ₹ 50,000.
Question 6.
XY company received an adjudication order passed by the assistance commissioner of central tax on 01-11-2019 under section 73 of the CGST Act, 2017 wherein it was decided as follows:
| Particulars | Other Information |
| CGST and SGST due (total) | Rs.600000 |
| Interest | @18% P.a. for number of delayed days |
| Penalty | Rs. 60000 |
The assessee filed an appeal before the appellate authority on 26-11-2019.
Case I
How much the company has to pay as pre-deposits of duty under section 107(6) of the CGST Act, 2017 ?
Case II
Whether your answer would be different if the assessee appeals only against part of the demanded amounts say ? 4,00,000 and admit the balance liability of tax amounting to ₹ 2,00,000 arising from the said order. [May 2018, 5 Marks]
Answer:
No appeal shall be filed before the Appellate Authority, unless the appellant has paid—
Pre-deposit = 100% of admitted dues (with interest and penalty) + 10% of disputed tax, (subject to a maximum of 25 crore) ;
| Case | Pre-deposit |
| I | = 10% of disputed tax = 10% of 6,00,000 = 60,000 |
| II | = admitted dues (2,00,000 + 18% interest for period of delay proportionate penalty of 20,000) + 10% of disputed tax of 4,00,000 viz, 40,000 |
Question 7.
Explain briefly the provisions regarding mandatory pre-deposit to be made before filing an appeal before Appellate Authority and Tribunal as per CGST Act, 2017. [May 2018, Old, 4 Marks]
Answer:
Pre-Deposit for filing appeal before appellate authority/appellate tribunal
| AUTHORITY | PRE-DEPOSIT |
| APPELLATE AUTHORITY [SEC. 107(6) of the CGST Act] | Admitted liability (tax, interest, fine, fee and penalty) in full plus 10% of the tax in dispute or 25 Cr. Whichever is less |
| APPELLATE TRIBUNAL [SEC. 112(8) of the CGST Act] | Admitted liability (tax, interest, fine, fee and penalty) in full plus 20% of the tax in dispute or 50 Cr. Whichever is less, in addition to the amount deposited before Appellate Authority as pre-deposit. |
Question 8.
In an order dated 20.08.20XX issued to GH (P) Ltd., the Joint Commissioner of CGST has confirmed a CGST demand of ₹ 280 crore. The company is disputing the entire demand of CGST and wants to know how much pre-deposit it has to make under the CGST Act, 2017 for filing an appeal before the Appellate Authority against the order of the Joint Commissioner.
Assuming that the Appellate Authority also confirms the order of the Joint Commissioner and the company wants to file an appeal before the Appellate Tribunal against the order of the Appellate Authority, how much pre-deposit it has to make under the CGST Act, 2017 for filing the said appeal? [RTP, Nov. 2019]
Answer:
Appeal filed before Appellate Authority
The amount of pre-deposit for filing an appeal with the Appellate Authority against the order of Joint Commissioner, where entire amount of tax is in dispute, is:
(i) ₹ 28 crore [10% of the amount of tax in dispute, viz. ₹ 280 crore] or
(ii) ₹ 25 crore,
whichever is less.
= ₹ 25 crore.
Appeal filed before Appellate Tribunal
The amount of pre-deposit for filing an appeal with the Appellate Tribunal against the order of the Appellate Authority, where entire amount of tax is in dispute, is:
(i) ₹ 56 crores [20% of the amount of tax in dispute, viz. ₹ 280 crores] or
(ii) ₹ 50 crores,
Whichever is less.
= ₹ 50 crores.
Question 9.
The proceedings under the CGST Act, 2017 before the authorities including the Appellate Tribunal can be attended by the “Authorized Representative”. Explain who can act as an au-thorized representative under the Act. [CS Professional Dec. 2017, 5 Marks]
Answer:
Authorised Representative
Broadly an authorised representative can be
- a relative,
- a regular employee,
- an advocate,
- a chartered accountant,
- a cost accountant,
- a company secretary, or
- a GST Practitioner
- Indirect tax gazetted officers after one year from retirement/resignation.
Disqualification for Authorised Representative
(a) who has been dismissed or removed from Government service; or
(b) who is convicted of an offence connected with any proceedings under the CGST Act/ SGST Act/UTGST Act/IGST Act or under the earlier law or under any of the Acts passed by a State Legislature dealing with the imposition of taxes on sale of goods or supply of goods and/or services; or
(c) who is found guilty of misconduct by the prescribed authority;
(d) who has been adjudged as an insolvent.
Question 10.
Hema Lubricants Ltd., filed an appeal before the Appellate Tribunal against the order of the Appellate Authority, wherein the issue was revolving around the place of supply. The Tribunal decided the issue against the company and in favour of the department. The company is of the firm opinion that its view is correct and hence there is need to take the issue to an appellate forum higher than the Appellate Tribunal.
As the Company Secretary, dealing with indirect tax matters, advise the company about filing of appeal before the appropriate forum. [CS Professional, June 2018, 5 Marks]
Answer:
Statutory Provision
As per Section 117( 1) of the CGST Act, 2017:- Where the supplier or department is not satisfied with the order passed by the State Bench or Area Benches of the Appellate Tribunal, appeal can be filed before the High Court if the High Court is satisfied that such an appeal involves a substantial question of law.
Nevertheless, appeal against orders passed by the National Bench or Regional Benches of the Tribunal can be filed only before the Supreme Court and not before High Court. As per Section 109(5) of the Act, only the National Bench or Regional Bench of the Tribunal can decide appeals where one of the issues involved relates to the place of supply.
In the given case
Since the issue involved in the given case relates to the place of supply, the appeal in case would have been decided by the National Bench or Regional Bench of the Tribunal. Consequently, Hema Lubricants Ltd., will have to file an appeal before the Supreme Court and not with the High Court.
Question 11.
With reference to the provisions of section 120 of the CGST Act, 2017, list the cases in which appeal is not to be filed. [MTP, May 18/Nov. 18, 6 Marks]
Answer:
Fixation Of Monetary Limit For Regulating The Filing Of Appeal
The Board may, on the recommendations of the GST Council, issue orders or instructions or directions fixing monetary limits for regulating filing of appeal or application by the CGST officer.
Central Tax Officer May File Appeal
Non-filing of appeal/application by a CGST officer on account of such monetary limits fixed by the Board shall not preclude such officer from filing appeal or application in any other case involving the same or similar issues or questions of law.
No Contention Of Consent By Central Tax Officer
No person, who is a party in application or appeal can contend that the CGST Officer has acquiesced in the decision on the disputed issue by not filing an appeal or application (on account of monetary limits).
Regards To The Circumstances In Which Appeal Etc. Is Not Filed
The Appellate Tribunal or Court hearing such appeal or application shall have regard to circumstances for non-filing of appeal or application by the CGST officer on account of monetary limits fixed by the Board.
Question 12.
Enumerate any four orders against which appeal cannot be filed under the CGST Act, 2017. [RTP, May 2019, 4 Marks]
Answer:
Section 121 lays down that no appeals whatsoever can be filed 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;
(b) an order pertaining to the seizure or retention of books of account, register and other documents; or
(c) an order sanctioning prosecution under the Act; or
(d) an order passed under section 80 (payment of tax in instalments).