Example

Audit was conducted on ABC Ltd., registered in Delhi by the Tax Authorities under section 65 of CGST Act and a show cause notice was issued to ABC Ltd. for claiming ITC without actual receipt of goods for the month of 25^th January, 2018. ABC Ltd. has not replied to the said show cause notice within specified time. Further on 15^thMarch, 2018 Joint Commissioner of Central Tax passed an adjudication order demanding Rs 60,00,000/- and imposing a penalty of equal amount u/s 122 of CGST Act.

Now ABC Ltd. wants to file an appeal with the Appellate Authority against the order as it does not agree with the demand. Determine whether:
 1. ABC Ltd. can file an appeal to Appellate Authority against the order passed by Joint commissioner?
 2. ABC Ltd. needs to approach both Central and State Appellate Authorities for exercising its right to appeal?
 3. Any pre-deposit needs to be made before filling appeal?

Answer

1. An appeal against order of any Adjudication Authority can be appealable before Appellate Authority as per section 107(1) but within 3 months from the date on which the said decision or order is communicated to such person.

Thus ABC Ltd. can file an appeal before Appellate Authority before 15^th June, 2018. Further as per section 107(4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month.

2. As per section 6 of CGST Act Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act.

Therefore, ABC Ltd. is required to file an appeal to Central Tax Appellate Authority only.

3. Yes as per section 107(6) No appeal shall be filed under sub-section (1), unless the appellant has paid'

    (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and

    (b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, in relation to which the appeal has been filed.
In the given case ABC Ltd. not agrees with whole amount demanded, it has to make pre-deposit of 10% of the amount of tax in dispute i.e. 10% of 60,00,000/- is Rs. 6,00,000/-.