S107 CGST | Appellate Authority Does Not Have Power To Remand Case Back To Adjudication Authority: Allahabad High Court

The Allahabad High Court has held that the appellate authority exercising jurisdiction under Section 107 of the Central Goods and Service Tax Act, 2017 does not have the power to remand the case back to the adjudication authority. It only has the power to confirm or modify or annul the order under appeal.

Section 107 of the CGST Act provides the remedy of appeal to an assesee aggrieved by any decision or order passed under the CGST Act. Sub-section 11 of Section 107 empowers the appellate authority to pass orders either confirming, modifying or annulling the order under challenge. However, sub-section 11 specifically prohibits the appellate authority from sending the case back to the authority whose order is under challenge.

Petitioner approached the High Court against the order of the Joint Director (CGST) (Appeals), Noida remanding the case of the petitioner back to the original adjudicating authority for de novo adjudication after giving due opportunity to the petitioner.

Counsel for petitioner submitted that the remand order passed by the appellate authority was against the mandate of Section 107(11) of the CGST Act.

However, counsel for respondent raised a preliminary objection on the maintainability of the petition on grounds that the petitioner has a remedy of appeal under Section 112 of CGST Act against the order of the appellate authority.

The Court observed that argument regarding alternate remedy was unsustainable for lack of GST Tribunals in the state. The Court held that the appellate authority had failed to exercise its jurisdiction in accordance with law.

The bench comprising of Justice Saumitra Dayal Singh and Justice Manjive Shukla held that

“Undeniably, the appeal authority may either confirm or modify or annul the order under appeal. In face of statutory prescription allowing for only three above described options to the appeal authority, no inherent power may remain be exercised by the appeal authority to set aside the order under appeal and remand the proceedings to the original authority. Any doubt in that regard has been clarified by the legislature itself by stating that the appeal authority shall not refer the matter back to the adjudicating authority.”

Accordingly, the order was set aside and the case was remanded to the appellate authority to pass fresh orders.

Case Title: M/S Kronos Solutions India Private Limited vs. Union Of India And 4 Others 2024 LiveLaw (AB) 78 [WRIT TAX No. - 1417 of 2023]

Case citation: 2024 LiveLaw (AB) 78

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