Appeals and Revisions

An Appeal under any law is an application to a higher court for a reversal of the decision of a lower court.
Appeals arise when there are any legal disputes.
Appeal level Orders passed by Appeal to
Adjudicating First Appellate
1st
Authority Authority
First Appellate
2nd Appellate Tribunal
Authority
3rd Appellate Tribunal High Court
4th High Court Supreme Court

Should every appeal be made to both CGST & SGST authorities?

No. As per the GST Act, CGST & SGST/UTGST officers are both empowered to pass orders. As per the Act, an
order passed under CGST will also be deemed to apply to SGST. However, if an officer under CGST has passed
an order, any appeal/review/ revision/rectification against the order will lie only with the officers of CGST.
Similarly, for SGST, for any order passed by the SGST officer the appeal/review/revision/rectification will lie
with the proper officer of SGST only.
General rules for filing GST appeals
All appeals must be made in prescribed forms along with the required fees.
Fee will be:
–The full amount of tax, interest, fine, fee and penalty arising from the challenged order, as admitted by
appellant,
AND
–10% of the disputed amount
In cases where an officer or the Commissioner of GST is appealing then fees will not be applicable.
Can an authorized representative appear in court?
Yes. Any person required to appear before a GST Officer/First Appellate Authority/Appellate Tribunal can assign
an authorized representative to appear on his behalf, unless he is required by the Act to appear personally.
An authorized representative can be-
1.a relative
2.a regular employee
3.a lawyer practising in any court in India
4.any chartered accountant/cost accountant/company secretary, with a valid certificate of practice
5.a retired officer of the Tax Department of any State Government or of the Excise Dept. whose rank was
minimum Group-B gazetted officer.
6.any tax return preparer

Retired officers cannot appear in place of the concerned person within 1 year from the date of their retirement.
Appeal cannot be filed in certain cases
The Board or the State Government may, on the recommendation of the Council, fix monetary limits for appeals
by the GST officer to regulate the filing of appeal and avoid unnecessary litigation expenses

Can all decisions be appealed against?

No. Appeals cannot be made for the following decisions taken by a GST officer-
1.An order to transfer the proceedings from one officer to another officer
2.An order to seize or retain books of account and other documents; or
3.An order sanctioning prosecution under the Act; or
4.An order allowing payment of tax and other amount in instalments.
A person unhappy with any decision or order passed against him under GST by an adjudicating authority can
appeal to the First Appellate Authority.
If they are not happy with the decision of the First Appellate Authority they can appeal to the National Appellate
Tribunal, then to High Court and finally Supreme Court.
 Inspection, Search, Seizure, Arrest under GST
A Joint Commissioner (or an officer of higher rank) may have “reasons to believe” that in order to evade tax, any
person has done the following:
1.Suppressed any transaction of supply
2.Suppressed stock in hand
3.Claimed input tax credit in excess
4.Violated of any of the provisions
5.Any transporter or owner/operator of a warehouse has kept goods which have escaped tax payment or has kept
accounts and/or goods in such a way as to evade tax
Then he can authorize any officer in FORM GST INS-01 to inspect places of businesses of:
•the taxable person or
•the transporter or
•owner/operator of warehouse
He can also examine any other place if he sees fit.
‘Reason to believe’ means having knowledge of facts (although does not mean having direct knowledge), that
would make any reasonable person, knowing the same facts, to reasonably conclude the same thing.
As per the Indian Penal Code, 1860, “A person is said to have ‘reason to believe’ a thing, if he has sufficient
cause to believe that thing but not otherwise.”
Reason to believe is a determination based on intelligent examination and evaluation. It is different from a purely
subjective consideration, i.e., an opinion. It is based on facts rather than an interpretation of facts.
Who can order search under GST and when?
On the basis of results of inspection or any other reason, Joint Commissioner of SGST/CGST or a superior officer
can order for a search if he has “reasons to believe” –
•There are goods which are liable for confiscation
•Any documents or books or other things which will be useful during proceedings and are hidden somewhere
He can, on his own or through an authorized officer, search and seize the goods and documents.
Search under GST
What is the difference between search & inspection?

‘Search’ involves an attempt to find something. Search, in tax/legal parlance, is an action of a government official (a tax
officer or a police officer, depending on the case) to go and look through or examine carefully a place, person, object etc.
in order to find something concealed or to discover evidence of a crime. The search can only be done under the proper and
valid authority of law.

‘Inspection’ is the act of examining something, often closely. In tax/legal language, it is a softer provision than search. It
enables officers to access any place of business of a taxable person and also any place of business of a person engaged in
transporting goods or who is an owner/operator of a warehouse or godown.
Is it necessary to record the ‘reasons to believe’ in writing, before issuing order for
Inspection/Search/Seizure?
GST Act does not mention recording the reasons to believe. In fact, Finance Act 2017 has amended Sec 132(1) & (1A) of
Income Tax Act retrospectively stating, that reason to believe, shall not be disclosed to any person or any authority or the
Appellate Tribunal.
Seizure under GST
The term ‘seizure’ has not been specifically defined in GST. In legal parlance, seizure is the act of taking over something or
someone by force through legal process, such as the seizure of evidence found at the scene of a crime. It generally implies
taking possession forcibly against the wishes of the owner.

What is the difference between Seizure and Detention?

Not allowing the owner any access to the seized goods by a legal order/notice is called detention. However, the ownership &
possession of goods still lie with the owner. It is issued when it is suspected that the goods are liable to confiscation.
Seizure is taking over or actual possession of the goods by the department. But the ownership is still with the owner. Seizure
can be made only after inquiry/investigation that the goods are liable to confiscation.

Procedure for seizure

The proper officer will give an order of seizure in FORM GST INS-02.

What are the powers of the officer authorized to search?

The officer authorized to search will have the power to seal the door of the premises. He can also break open the door of any
premises if access is denied. He can also break open any cupboard or box in which goods, books, documents etc. are
suspected to be concealed.

What happens if it is not possible to seize the goods?

If it is not practicable to seize the goods, the proper officer will order the owner not to remove these goods without prior
permission of the officer. The officer will issue an order of prohibition in FORM GST INS-03.
How long will the books/documents remain with the officer?
The officer will keep the books and documents as long as it is necessary for examination and inquiry. Other books which
are not relevant to the issue of notice will be returned within 30 days from the date of notice.
The seized goods can be released on a provisional basis against a bond for the value of the goods in FORM GST INS-04.
The owner must also furnish a security in the form of a bank guarantee for the amount due (applicable tax, interest and
penalty payable).
If the owner fails to produce the provisionally released goods at the appointed date and place then the security will be
encashed and adjusted against the amount due.
CA. Mannu Goyal

What happens after seizure?

1.The person, whose documents are seized, can make copies only in the presence of an officer.
2.If notice is not issued within six months (extendable by 6 more months) of the seizing the goods, they will be returned.
3.The Government can issue a list of hazardous or perishable goods which can be disposed off as soon as they are seized.
4.All goods seized will be listed properly by the officer.

Does the Code of Criminal Procedure apply in such cases?

The provisions of the Code of Criminal Procedure will apply to search and seizure.

Other ways to check/inspect

The Commissioner or an authorized officer can purchase any goods and/or services from a taxable person. This will be done
to check the issue of tax invoices, whether they are maintained correctly, and whether GST amount is clearly displayed. When
the goods are returned, the amount will have to be refunded by the taxable person and the sales invoice will be canceled.
Arrest under GST

If the Commissioner believes a person has committed an offence u/s 132, the offender can be arrested under GST.
Read our article to know more about arrest under GST.

CA. Mannu Goyal

 Demands and Recovery
GST is payable on a self-assessment basis. If the assessee pays the tax on self-assessment correctly then there
will not be any problem. If there is any short payment or wrong utilisation of input credit, then the GST
authorities will initiate demand and recovery provisions against the assessee.

Time Limit
The proper officer is required to issue the show cause notice 3 months before the time limit. The maximum
time limit for the order of payment is 3 years from the due date for filing of annual return for the year to
which the amount relates.

For Other Tax Periods

Once the above notice has been issued, the proper officer can serve a statement, with details of any unpaid
tax/wrong refund etc. for other periods not covered in the notice. A separate notice does not have to be issued
for each tax period.

Voluntary Tax Payment

A person can pay tax along with interest, based on his own calculations (or the officer’s calculations), before
the notice/statement is issued and inform the officer in writing of the same. The officer will not issue any
notice in this case.
CA. Mannu Goyal
However, if the officer finds that there is short payment, they can issue a notice for the balance amount.

No Penalty
If the taxpayer pays all their dues within 30 days from date of notice, then the penalty will not be applicable.
All proceedings (excluding proceedings u/s 132,i.e., prosecution) regarding the notice will be closed.

Penalty in Other Cases

The tax officer will consider the taxpayer’s representation and then calculate interest and penalty. Penalty will be
10% of tax subject to a minimum of Rs. 10,000. The tax officer will issue an order within three years from the
due date for filing of relevant annual return.
Notice when there is Fraud for tax shortfall (Section 74)

This section applies to cases of tax evasion involving:

•Fraud
•Wilful misstatement
•Suppression of facts
This results in:
•Unpaid/short paid tax or,
•Wrong refunds or,
•Wrongly availed/utilized input tax credit

In such cases, the proper officer will serve a show cause notice to the taxpayer. They will be required to pay
the amount due along with interest and penalty.

Time Limit
For cases of fraud, the proper officer is required to issue the notice 6 months before the time limit. The
maximum time limit is 5 years from the due date for filing of annual return for the year to which the amount
relates.
For Other Tax Periods
Once the above notice has been issued, the proper officer can serve a statement, with details of any unpaid
tax/wrong refund etc. for other periods not covered in the notice. A separate notice does not have to be issued
for each tax period.
CA. Mannu Goyal
Voluntary Tax Payment
If the person pays tax along with interest and a 15% penalty based on their own calculations (or the officer’s
calculations) before the notice/statement is issued and informs the officer in writing, then the officer will not
issue any notice.
However, if the officer finds that there is short payment, they can issue a notice for the balance amount.
If the taxpayer pays all their dues and a penalty of 25% within 30 days from the date of the notice, then all
proceedings (excluding proceedings u/s 132,i.e., prosecution)regarding the notice will be closed.

Issue of Order
The tax officer will consider the taxpayer’s representation and then calculate interest and penalty and issue
an order.
The order must be issued within five years from the due date for filing of the relevant annual return. [For
wrong refunds the order must be issued within five years from the date of the wrong refund].
If the taxpayer pays all their dues and a penalty of 50% within 30 days from the date of order, then all
proceedings (including prosecution) regarding the notice will be closed. CA. Mannu Goyal
 CA. Mannu Goyal

CA. Mannu Goyal

 Tax collection at Source
Tax collected at source (TCS) is the tax payable by a seller which he collects from the buyer at the time of sale.
Section 206C of the Income-tax act governs the goods on which the seller has to collect tax from the purchasers.

Goods covered under TCS provisions and rates applicable to them

Type of Goods Rate

Liquor of alcoholic nature, made for consumption by humans 1%
Timber wood under a forest leased 2.5%
Tendu leaves 5%
Timber wood by any other mode than forest leased 2.5%
A forest produce other than Tendu leaves and timber 2.5%
Scrapl, Minerals like lignite, coal and iron ore 1%
Bullion that exceeds over Rs. 2 lakhs/ Jewellery that exceeds over Rs. 5 lakhs 1%
Purchase of Motor vehicle exceeding Rs. 10 Lakhs 1%
Parking lot, Toll Plaza and Mining and Quarrying 2%
Classification of Sellers and Buyers for TCS

There are some specific people or organizations who have been classified as sellers for tax collected at source. No
other seller of goods can collect tax at source from the buyers apart from the following list :
1.Central Government
2.State Government
3.Local Authority
4.Statutory Corporation or Authority
5.Company registered under Companies Act
6.Partnership firms
7.Co-operative Society
8.Any person or HUF who is subjected to an audit of accounts under Income tax act for a particular financial year.