Section 2(8) defines “Appellate Authority” as an authority appointed or authorised to hear appeals as referred to in section 107. Section 107(1) refers to the “prescribed First Appellate Authority”. Section 2(87) defines “prescribed” means prescribed by rules made under this Act on the Recommendations of the Council. Presently, in the central indirect taxes, a Commissioner (Appeals) is the first appellate authority. In the states, the first appeals are decided by a Deputy Commissioner (Appeals); some states also have JC (Appeals)/ADC (Appeals).
Section 107 provides that a person who is aggrieved by a decision or order passed under this Act or SGST Act or UTGST Act by an adjudicating authority, can file an appeal to the Appellate Authority (AA, for short). It is important to note that it is only the aggrieved person who can file the appeal. Also, the appeal must be against a decision or order passed under the Act. Further, as will be discussed later, some decisions or orders are not appealable (section 121).
The time limit for the party to file an appeal before the AA is 3 months from the date of communication of the impugned order. But the AA may condone a delay of upto one month, if he is satisfied that there was sufficient cause for such delay.
The appeal forms etc. will be prescribed by Rules being made separately.
The AA has to follow the principles of natural justice - such as hearing the appellant, allowing reasonable adjournments (not more than 3 to a party), permitting additional grounds (if found reasonable), etc. The AA can also make such further inquiry as may be necessary. In case of deficient or incomplete application, the AA shall issue a deficiency memo to the applicant and if the applicant fails to comply with it, the same can be rejected by AA.
On conclusion of the appeal process, the AA will pass his order (Order-in-Appeal) which may confirm, modify or annul the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order: The AA can also increase the “rigour” of the order appealed against by enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit, but this can only be done after the AA has given to the appellant a reasonable opportunity of showing cause against the proposed order. Further, if 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 utilized, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time Limit specified under section 51.
The Order-in-appeal has to be a “speaking order” i.e. it should state the points for determination, the decision thereon and the reasons for the decision.
The law provides an advisory (“where it is possible to do so”) time limit of 1 year for the AA to decide the appeal.
Copies of the Orders passed by the AA will be sent to the appellant, the adjudicating authority, 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.
Every order passed under this section shall, subject to the provisions of section 108 or section 113 or section 117 or section 118 be final and binding on the parties. |
