Appeal in GST | Know All about Appeal to Appellate Authority | Provisions , Procedures and Forms

What is Appeal ? | Basics and related concepts

The Taxpayer and the Tax officer can be of different viewpoints or opinion with regards to their understanding of law. This difference of opinion might raise a dispute between the taxpayer and tax officer. The statue contains the appeal provisions in law to resolve the differences in opinions via appeals mode. Taxpayers upset or disappointed ( aggrieved)  by the decision of tax authorities have the legal remedy available with them which is hereby referred to as appeal.  

Similarly higher authorities may not agree with the decisions made by lower authorities within the tax department. (Revisional Order). Appeal by the tax authorities are referred to as Review application However appeal by the tax authority has not been discussed in the article.

The need for a dispute resolution mechanism i.e. appeal mechanism is increasing because of the increasing numbers of disputes. 

The term adjudicating authority is defined in section 2(4) of The CGST Act, 2017 which broadly refers to officers in the GST department against whom order appeal can be preferred.  The term adjudication authority does not include CBIC, revisional authority, authority of advance ruling, and all other appellate authorities. 

The term ‘appeal’ has not been defined in the GST laws however appeals can be termed as a legal right which comes with certain conditions.

The Term “Appellate Authority” has been defined in Section 2(8) of The CGST Act, as follows 

“means an authority appointed or authorised to hear appeals as referred to in section 107”

The Provisions relating to appeals to Appellate Authority (AA)  are contained in Section 107 of the CGST Act, 2017 and Rule 109 of the CGST Rules, 2017. These provisions are discussed in detail in the later part of this writeup.

The Revisional Authority has certain powers to pass such order on his motion or on information received, if they considers the order passed by the officier subordinate to him  is erroneous in so far as it is prejudicial to the interest of revenue and is illegal or improper or has not taken into account certain material facts.

The concept of revisional authority is not discussed in detail and above mentioned activity is only for quick reference of readers on better understanding of related concepts of appeal. 

Who Can File Appeal? 

A person who is aggrieved by a decision or order passed against him by an adjudicating authority, can file an appeal to the Appellate Authority.  The appeal must be against a decision or order passed under the Act. 

Few practical examples of appealable orders i.e taxpayer is aggrieved 

• Order passed by the tax authorities resulting in tax payable by taxpayer or 
• Where penalty is imposed on taxpayer with any reasonable cause or 
• Where the order is passed without proper justification or 
• Where the benefits available under the law is denied to the taxpayer.

What are the different levels of appeal ?

Level	Appeal to
Level – 1	Appellate Authority
Level – 2	Appellate Tribunal
Level – 3	High Court
Level – 4	Supreme Court

Appeal by taxpayers before the first authority has been illustrated in this writeup/ article.

What are the non-appealable orders ?

The following mentioned are the non appealable orders as per Section 121

• 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; or 
• an order sanctioning prosecution under the Act; or 
• an order passed under section 80 (payment of tax in instalments).

Appellate Authority   (AA) 

The provisions relating to appeal before the first appellate authority are contained in Section 107 of the CGST act, 2017 read with Rule 108 of the CGST Rules, 2017.

Any person who is aggrieved by a decision or order passed against him by an adjudicating authority can file an apparel to the appellate authority. The time limit to file an appeal is 3 months from the date of communication of decision or order against which the taxpayer is aggrieved. The appeal to appellate authority has to be filed in FORM APL-01 along with the relevant documents.

The Rule 108(1) requires issuance of provisional acknowledgement immediately to the appellant.

Rule 108(3) requires filing of a Certified copy of the decision or order appealed against before the appellate authority within 7 days of filing the appeal .

The appeal shall be treated as filed only when the final acknowledgement, indicating the appeal number, is issued.

Date of Filing Appeal
Where the decision or order appealed against is uploaded on the common portal	The Appellate Authority shall issue a final acknowledgment, indicating appeal number, in FORM GST APL-02 and the date of issue of the provisional acknowledgment shall be considered as the date of filing of appeal:
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 acknowledgment, indicating appeal number, shall be issued in FORM GST APL-02 by the Appellate Authority  and  the date of issue of the provisional acknowledgment shall be considered as the date of filing of appeal:
The date of submission of a self-certified copy of the decision or order such copy shall be considered as the date of filing of appeal where the said is not submitted within a period of seven days from the date of filing of FORM GST APL-01.

• Condonation of delay | Section 107(4) 

The Appellate Authority may allow appeal to be presented within a further period of one month if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months. It is important to mention here that the phrase sufficient cause is not defined anywhere in the GST law and accordingly it depends on the facts and circumstances of each case and at the discretion of the appellate authority.

• Pre- Deposit | Section 107(6) 

Any person who prefers to file an appeal has to mandatorily deposit a certain amount as a deposit. Amongst other, one of the key reasons behind the concept of pre-deposit is to discourage the meaningless appeals. 

Manner of computation of pre-deposit arising from the impugned order
In respect of amount	Quantum of pre deposit	To be computed on
As admitted by the appellant	Amount admitted in full	tax, interest, fine , fee and penalty arising from the impugned order
Amount not admitted by the appellant	10% on remaining amount subject to a maximum of INR 50 crores  (amount INR 25 Cr. for CGST & SGST each)	Tax (amount to be calculated only on tax amount not on interest, fine, fees or penalty)
Pertaining to order under section 129(3)  (passing of penalty order detaining or seizing goods or conveyance)	25% of penalty	penalty

 

• Deemed stay of recovery proceedings | Section 107(7) 

The recovery proceedings for the balance amount shall be deemed to be stayed if the appellant has paid the amount of pre-deposit.

• Opportunity of Being heard | Section 107(8) 

Section 107(8)  of The CGST Act, 2017 requires mandatorily providing the opportunity of being heard to the appellant. Further it is in consonance with the Principle of natural justice.

• Adjournment | Section 107(9) 

The adjournment of hearing is allowed to any of the parties; at the discretion of appellate authority if sufficient cause (valid reason) is shown at any stage of appeal. The reasons for adjournment have to be recorded in writing. Maximum 3 adjournments are allowed to a party.

• Additional grounds of Appeal | Section 107(10) 

The submission of additional ground which was not submitted earlier in the form of appeal is allowed at the discretion and satisfaction of appellate authority on fulfilment of following condition;

• Sufficient cause is shown during the hearing of appeal; and
• Omission of which was not willful or unreasonable

 

• Order of appellate authority has to be speaking order | Section 107(11)

Order of appeal

The appellate authority shall pass an order as it thinks just and proper after making such further inquiry as may be necessary which may have any of the following effect on the decision or order appealed against

• Confirming; or 
• Modifying; or
• annulling

It can be inferred that order of AA may be favourable to appellant, may provide some relief to appellant or may even worsen to increase the demand.

No power to remand back

The AA has no powers to refer the case back to the appellant authority who passed impugned order against which appeal was filed. 

The AA has to issue a summary of order clearly indicating the final amount of demand confirmed in ‘Form GST APL-04’.  – Rule 113(1)

Show cause and Show cause notice

The AA shall give reasonable opportunity of showing cause before passing the following proposed 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 
• reducing the amount of refund; or
• input tax credit

The Order requiring the appellant to pay such tax or input tax credit shall be passed only if 

• appellant is given notice to show cause against the proposed order and
• the order is passed within the time limit specified under section 73 or section 74; and 

The AA 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,’

 

• Speaking order | Section 107(12)

The order of AA disposing the appeal shall be in writing and state the points for

• Determination;
• Decision thereon and
• The reasons for such decision 

 

• Time limit to pass order | Section 107(13)

The AA shall, where it is possible to do so hear and decide every appeal within a period of one year from the date on which it was filed. 

Where issuance of order is stayed by an order or court or tribunal, the period of said stay to be excluded in a period of one year.

• Communicating and copy of the order | Section 107(14)

The AA shall communicate the order passed by it on disposal of appeal

• to the appellant, 
• respondent and 
• to the adjudicating authority.

 

• Copy of the order | Section 107(15)

A copy of the order passed by the AA shall also be sent 

• to the jurisdictional Commissioner or the authority designated by him in this behalf; and 
• the jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority designated by him in this behalf.

 

• Binding effect of the order | Section 107(16)

Every order passed under this section shall be final and binding on the parties, subject to the provisions of Section

• 108 (Powers of revisional authority) ; or 
• 113 (Orders of Appellate Tribunal); or 
• 117 (Appeal to High court); or 
• 118 (Appeal to Supreme court);

Appeal Forms

Form No.	Particulars
FORM GST APL-01	Appeal to Appellate Authority
FORM GST APL-02	Acknowledgment for submission of appeal
FORM GST APL-03	Application to the Appellate Authority by the tax authorities
FORM GST APL-04	Summary of the Demand after issue of Order by the Appellate Authority, Revisional Authority, Tribunal or Court
FORM GST APL-05	Appeal to the Appellate Tribunal
FORM GST APL-06	Cross-objections before the Appellate Tribunal
FORM GST APL-07	Application to the Appellate Tribunal under sub section (3) of Section 112
FORM GST APL-08	FORM GST APL-08 – Appeal to the High Court under section 117

 

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