SECTION 79 APPEALS TO FIRST APPELLATE AUTHORITY

GST Update 11.07.2016

GST DAILY DOSE OF UPDATION:-

SECTION 79 APPEALS TO FIRST APPELLATE AUTHORITY:- Any person aggrieved by any decision or order passed against him under this Act by an adjudicating authority may appeal to the First Appellate Authority. The appeal may also be filed by revenue department. The time period of filing appeal under this section is three months from the date of communication of order. It is pertinent to note that presently, the time limit for filing appeal to the first appellate authority is two months from the date of communication of order. The increased time limit is welcome step by the government as many a times, the assessees are unaware of the time limit to file appeal to the first appellate authority.

It is also provided that if there was sufficient cause for not filing appeal within the stipulated time period, the first appellate authority may allow it to be admitted within a further period of one month. This provision is contained in the present laws also. However, it was expected that in the proposed GST regime, the period of condonation for delay in filing appeal will be enhanced and rather, the first appellate authority should be given power to condone the delay of any number of days as is presently available with the Tribunal if there were sufficient reasons for delay in filing appeal.

There is also material departure in the mandatory pre-deposit provisions proposed in the GST regime. No appeal shall be filed unless the appellant has deposited in full, such amount of tax, interest, fine, fee and penalty arising from the impugned order as admitted by him AND a sum of 10% of the remaining amount in dispute arising from the order, in relation to which appeal has been filed. The amount in dispute means demand and amount of fee/penalty imposed. It is worth noting that the mandatory pre-deposit conditions that are proposed are extremely harsh. Not only this, the departmental authorities shall also have right to apply to first appellate authority for higher pre-deposit, not exceeding 50% of the amount in dispute, in a case which is considered by the Commissioner of GST to be a ‘serious case’. Serious case means case involving disputed tax liability of not less than Rs. 25 Crores.

It is submitted that presently, a pre-deposit of 7.5% is required to be made of duty in case where duty and penalty is in dispute and 7.5% of the penalty if only penalty is in dispute. However, in the proposed regime, pre-deposit at increased rate of 10% is required to be made. Not only this, the portion of demand admitted along with interest and penalties is required to be paid in full apart from 10% pre-deposit. This will definitely put additional burden on assessee while opting to file appeal. Not only this, presently, there is cap of Rs. 10 Crores thereby meaning that pre-deposit cannot exceed Rs. 10 Crores. However, there is no such cap in the proposed GST regime and rather departmental authorities have been given powers to enhance the pre-deposit upto 50% of the amount disputed. This is very harsh condition as while in meritorious cases also, the assessees are required to comply with condition of mandatory pre-deposit and there is no provision for filing stay application while on the other hand, the departmental authorities can ask for higher pre-deposit.

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GST Update 11.07.2016

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