If you are a GST ( Goods and Services Tax ) practitioner or preparing to enter the field, filing GST appeals before the authorities will soon become a routine part of your work. Mastering the process of filing these appeals accurately is crucial to serve your clients effectively.
As a GST practitioner, it’s essential to ensure that appeals are submitted correctly and within the stipulated timelines. Below are some vital guidelines to consider during the GST appeal process, complete with examples to help you navigate its complexities. Keep the following points in mind when filing a GST appeal:
Clearly Read and Understand the GST Demand Order
Before initiating any appeal, carefully review and understand the GST demand order issued by the tax authorities. This document contains details about the tax liability, penalties, and interest that have been levied, as well as the reasons for the decision. Misinterpreting the order can lead to improper grounds for appeal, which can weaken your client’s case.
Analyse the Reason for Non-Acceptance of Contentions in the Previous Reply (if filed)
If a response to a Show Cause Notice (SCN) was already submitted and subsequently rejected by the authorities, it’s essential to understand why the arguments were not accepted. This step will help refine your defence and strengthen your appeal. Check whether the authorities have given a proper reason for the rejection of your contentions.
Ensure the Order is a ‘Speaking Order’
A speaking order is one that clearly states the reasoning behind the officer’s decision. It must provide detailed justifications for the conclusions drawn. If the order lacks sufficient reasoning, it may be easier to challenge it on appeal. There are many judgments which clearly state that the order must be speaking. That is it should speak for itself.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
Example: If an order simply states that “input tax credit (ITC) is disallowed” without elaborating on why it was disallowed (e.g., due to missing invoices or non-compliance), the appeal can point out that the order is non-speaking, strengthening your position.
Cross Verify Order with Previous SCN
This step is important. Numerous cases have shown discrepancies between the demand amount stated in the Show Cause Notice (SCN) and the final demand order. Additionally, there are instances where issues that were not raised in the SCN appear in the final order, often without any opportunity for a hearing on those new matters.
It’s essential to carefully compare these documents to ensure that all disputed amounts and issues are accurately addressed and that you are prepared to contest any unexpected claims.
Note the Disputed Provisions
Identify the specific provisions of the Act that are in dispute, whether they pertain to tax rates, short payment, interception of goods, classification of goods or services, or procedural matters like Input Tax Credit (ITC) claims.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
As an initial step in securing relief for your client, focus on the same disputed provision. Cross-check the elements of the contested legal provision against the facts of the case to ensure alignment. It is important to verify that the demand raised in the order adheres to the legal requirements, confirming the dispute is based on a proper application of the law.
Ensure the Order was Issued Within the Limitation Period
When you first read the order, check the financial year, date of SCN issuance and final order date. The GST authorities are required to issue demand orders within a specific timeframe as provided in the Act. If the order has been issued after the limitation period has expired, it can be challenged as invalid. The government has extended the 73 and 74 demand order issuance date, thus such dates should also be considered while noting the limitation period. According to the Section 73(2), the proper officer shall issue the notice under sub-section (1) at least three months. Make sure that this limitation period was followed by the department.
Ensure the Order Was Issued providing Hearing Opportunity
Under Section 75(4) of the GST Act, a personal hearing must be granted to the assessee or taxpayer if there is a possibility of an adverse order being issued. Several High Court rulings have emphasized that providing a personal hearing is mandatory in such circumstances.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
Therefore, it is essential to confirm that your client received a sufficient personal hearing. If this procedural safeguard was overlooked, it can serve as a strong ground for appeal, highlighting a violation of the principles of natural justice. Attend the personal hearings without any adjournments.
When filing an appeal before the first appellate authority, adhering to strict timelines is essential. As a GST practitioner, it’s your responsibility to ensure your client meets all statutory deadlines.
For instance, when a demand order, such as a Section 73 order, is issued by the department, you must file the appeal within 90 days. If necessary, the appellate authority has the discretion to condone delays for an additional 30 days beyond the initial 90-day period. This provides a maximum of 120 days, including the condonable period, to file the appeal. Meeting these deadlines is crucial to safeguarding your client’s rights.
As GST law remains dynamic and continuously evolving, it is essential to stay updated on all relevant circulars, notifications, and key judgments from the High Courts and Supreme Court.
Despite the law being well-established, frequent amendments and clarifications are made in response to emerging issues. Keeping abreast of these developments ensures you are well-prepared to navigate the latest changes and provide accurate advice to your clients.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
You can utilise different websites like Taxscan for getting important circulars, notifications, and Judgments.
Draft the Appeal ensuring it is Filed Correctly and Completely
Before filing an appeal, carefully draft it by considering the facts, issues, and any previous replies to the Show Cause Notice (SCN). Ensure that the appeal form, typically APL-01, is filled out completely and accurately, as any errors can lead to delays or rejection.
While the GST portal provides space for stating facts and issues, the limited space may not allow you to present your arguments clearly. Therefore, draft a detailed appeal separately in a Word document and upload it along with the APL-01. In the section asking for issues, simply mention “See separate sheet attached” to direct the authority to your detailed submission.
Address Each Disputed Issue Separately
Another important aspect to keep in mind while drafting the appeal is to address each issue separately and distinctly. Clearly differentiate between admitted and disputed points, explicitly mentioning both in the appeal.
For the disputed issues, take each one individually and provide a detailed explanation for each. This approach enables the appellate authority to focus on specific contentions without confusion, facilitating a more effective review of your arguments.
Present Clear and Strong Grounds for the Appeal
Even if you are good in law, accounting, or courtroom presentations, the heart of a successful appeal lies in effective drafting. Those who file appeals must possess strong drafting skills; if this isn’t your strength, it’s essential to develop it. Unlike oral presentations, where you highlight key points, drafting requires that all necessary arguments and evidence are clearly articulated on paper. Well-structured and robust grounds can significantly enhance your chances of success.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
In addition to drafting skills, effective research capabilities are important. Conducting thorough research can provide new insights into your disputed issues and help you formulate compelling arguments. The grounds for appeal should be concise, clear, and supported by solid legal reasoning, as vague or weak arguments are likely to be dismissed.
Incorporate Precedents, Circulars, and Notifications
As mentioned previously, strong drafting skills are essential in any legal matter, whether civil or criminal. A well-crafted appeal should include relevant case laws, circulars, and notifications that substantiate your claims.
In GST, the government frequently issues numerous circulars and notifications, making it crucial to stay updated on these developments. Incorporating precedents from the High Courts and the Supreme Court into your draft can significantly strengthen your case. To enhance your research efficiency, utilise various websites that publish and summarise case laws.
Verify the Disputed Tax Amount, Penalty, and Interest Accurately
Make sure the tax amount, penalty, and interest disputed are correctly calculated and reflected in the appeal. Inaccuracies can lead to unnecessary complications. The GST orders are issued by the authorities who are humans. Thus, mistakes are common. It is better to cross check the demands, disputed tax with the penalty and interest.
Submit Complete and Proper Documentation
Evidence is relevant in any case. E-way bill, invoices, delivery challans, proof of tax payment supplier declarations, bank statements..etc are very important and it should be attached to the case as per its relevance. You can add annexures while filing the GST appeal. The document shall be below the file size limit of 5 MB.
Make the Required Pre-Deposit
Before an appeal can be entertained, a pre-deposit of 10% of the disputed tax amount must be made. Make sure that you collect the payment from the client and make the payment without any delay.
Review the Appeal Before Filing
Once all the aforementioned conditions have been satisfied, it’s crucial to thoroughly review your draft before filing. Your appeal should be prepared with the same level of rigour as if it were going before the High Court. Carefully check that you haven’t missed any important details. Make sure that all documents are attached. Even though you can make additional grounds during hearing or during the trial stage, it is better not to miss in the beginning itself.
Download Acknowledgment and APL-01
Once the appeal is submitted online, download the acknowledgment and the APL-01 form for your records. These documents are important for tracking and reference. It is also a proof for your pre-deposit payment.
Remember to File Physical Copy (if needed)
In certain states like Kerala, physical submission of documents is also required. Thus, remember to file the physical copy to the needed state. Thus, check the requirement of filing of physical copy while filing the appeal.
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