CGST Section 105 — Powers of Authority, Appellate Authority and National Appellate Authority
CGST Act · Powers of Authority, Appellate Authority and National Appellate Authority
Quick Answer
Section 105 of the CGST Act, 2017 governs Powers of Authority, Appellate Authority and National Appellate Authority. It provides the core statutory basis, outlining the essential legal principles, rights, and liabilities under Indian indirect tax law. Section 105 GST: Powers of Authority, Appellate Authority and National — eligibility, conditions, case laws and compliance impact under Indian tax law.
Plain-English Explanation
Section 105 of the CGST Act outlines the powers granted to the Authority, Appellate Authority, and National Appellate Authority, enabling them to effectively investigate and adjudicate matters related to anti-profiteering under GST. In essence, it equips these bodies with the necessary legal authority to function like a civil court in certain respects, ensuring fair and thorough proceedings.
This section applies specifically to the Authority, the Appellate Authority, and the National Appellate Authority established under the CGST Act to examine cases of alleged profiteering by businesses. It comes into play when these authorities are exercising their powers to determine whether a business has unfairly benefited from a reduction in GST rates or Input Tax Credit (ITC) by not passing on the corresponding benefit to consumers through reduced prices. The powers granted under this section are crucial for conducting investigations, gathering evidence, and ultimately, making informed decisions.
Here’s a breakdown of the key powers conferred by Section 105:
- Powers of a Civil Court: The Authority, Appellate Authority, and National Appellate Authority have the same powers as a civil court under the Code of Civil Procedure, 1908, regarding:
- Discovery and Inspection: They can compel businesses to disclose documents and allow inspection of their premises to gather relevant information.
- Enforcing Attendance: They can summon individuals, including company representatives, suppliers, and customers, to appear before them and provide testimony under oath.
- Issuing Commissions: They can appoint commissioners to examine witnesses or documents in locations outside their jurisdiction.
- Compelling Production of Records: They can order businesses to produce their books of accounts, financial records, and other relevant documents.
- Deemed Civil Court (Limited): The Authority, Appellate Authority, and National Appellate Authority are considered civil courts for the purpose of Section 195 of the Criminal Procedure Code (CrPC). This relates to prosecution for giving false evidence. However, they are not considered civil courts for the purposes of Chapter XXVI of the CrPC, which deals with offenses affecting the administration of justice. This means they cannot directly initiate criminal proceedings.
- Judicial Proceedings: Every proceeding before these authorities is deemed to be a judicial proceeding under Sections 193 and 228, and for the purpose of Section 196 of the Indian Penal Code (IPC). This implies that giving false evidence or causing disturbance during the proceedings are punishable offences under the IPC.
Practical Examples for Business Owners:
- Imagine a restaurant receives a notification from the Authority to provide its sales data and purchase invoices for the past year, following a GST rate reduction on restaurant services. Under Section 105, the restaurant is legally obligated to comply with this request. Refusal to do so could lead to penalties.
- Suppose the Appellate Authority summons the CFO of a manufacturing company to testify about the company's pricing strategy after a reduction in GST on raw materials. The CFO must attend the hearing and provide truthful answers, as if they were appearing before a civil court. Providing false information could result in prosecution.
- If the National Appellate Authority believes that additional information is needed from a supplier located in a different state, it can appoint a commission to examine the supplier's records and take their statement.
Important Amendments:
The Finance (No. 2) Act, 2019, amended Section 105 to include the "National Appellate Authority" within the purview of the section. This change extended the powers previously granted to the Authority and Appellate Authority to the newly established National Appellate Authority.
In conclusion, Section 105 provides the necessary legal teeth to the anti-profiteering mechanism under GST. It empowers the Authority, Appellate Authority, and National Appellate Authority to effectively investigate and adjudicate cases of unfair profiteering, ensuring that businesses pass on the benefits of GST rate reductions to consumers. Businesses must understand these powers and cooperate fully with these authorities during any investigation to avoid potential penalties and legal repercussions. Compliance and transparency are key to navigating the anti-profiteering provisions of the GST law.
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Browse all case laws →Frequently Asked Questions
What specific powers are granted to authorities under CGST Section 105?
CGST Section 105 grants the Authority, Appellate Authority, and National Appellate Authority the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit, in respect of the following matters, namely: (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of documents; (c) receiving evidence on affidavits; (d) issuing commissions for the examination of witnesses; and (e) such other matters as may be prescribed.
Can the Authority, Appellate Authority, or National Appellate Authority compel a person to attend a hearing under CGST Section 105?
Yes, under clause (a) of CGST Section 105, these authorities have the power to summon and enforce the attendance of any person and examine them on oath. Failure to comply with such a summons could result in penalties as per the Code of Civil Procedure, 1908.
Does CGST Section 105 allow for cross-examination of witnesses?
While CGST Section 105 specifically mentions the power to examine witnesses on oath and receive evidence on affidavits, it doesn't explicitly state the power of cross-examination. However, since the authorities possess powers akin to a civil court, the implication is that parties have the right to challenge the evidence presented, including cross-examining witnesses presented by the opposing side, subject to the Authority's discretion.
What types of documents can the Authority, Appellate Authority, or National Appellate Authority demand under CGST Section 105?
Under clause (b) of CGST Section 105, these authorities can require the discovery and production of any document relevant to the case. This includes, but is not limited to, invoices, records, returns, financial statements, and any other information that can shed light on the matter under consideration. The Authority will determine the relevance and admissibility of the requested documents.
If the Authority, Appellate Authority, or National Appellate Authority needs to examine a witness in a remote location, can they do so under CGST Section 105?
Yes, under clause (d) of CGST Section 105, these authorities have the power to issue commissions for the examination of witnesses. This allows them to appoint a commissioner to examine a witness who may be unable to attend a hearing in person due to distance or other valid reasons. The commissioner will then record the testimony and submit it to the Authority.
Are the powers granted to the Authority, Appellate Authority, and National Appellate Authority under CGST Section 105 subject to any limitations?
While Section 105 grants significant powers, these powers are ultimately limited to the scope of the Authority's jurisdiction and the specific matter under consideration. The authorities must exercise these powers reasonably and in accordance with the principles of natural justice. Furthermore, the use of these powers is subject to judicial review, and any abuse of power can be challenged in higher courts.
What are 'other matters as may be prescribed' referred to in CGST Section 105(e)?
The 'other matters as may be prescribed' in CGST Section 105(e) refer to additional powers that may be specified in the CGST Rules or other relevant regulations issued by the government. These prescribed matters would further define the scope and modalities for exercising the powers granted to the Authority, Appellate Authority, and National Appellate Authority. Taxpayers and professionals should remain updated on any notifications or circulars that specify these additional powers.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Exercising Powers | The Authority, Appellate Authority, or National Appellate Authority exercises powers regarding discovery and inspection, enforcing attendance and examining persons on oath, issuing commissions, and compelling production of documents. |
| Powers of a Civil Court | For exercising its powers, the Authority, Appellate Authority, or National Appellate Authority has all the powers of a civil court under the Code of Civil Procedure, 1908. |
| Deemed Civil Court (Section 195 CrPC) | The Authority, Appellate Authority, or National Appellate Authority is deemed to be a civil court for the purposes of section 195 of the Code of Criminal Procedure, 1973. |
| Not a Civil Court (Chapter XXVI CrPC) | The Authority, Appellate Authority, or National Appellate Authority is NOT deemed to be a civil court for the purposes of Chapter XXVI of the Code of Criminal Procedure, 1973. |
| Judicial Proceedings | Every proceeding before the Authority, Appellate Authority, or National Appellate Authority shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code. |
| Purpose of Section 196 IPC | Proceedings are also considered judicial for the purpose of section 196 of the Indian Penal Code. |
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Browse all notifications →Amendment History
Substituted by s.109 of the Finance (No. 2) Act, 2019 (23 of 2019) for "Powers of Authority and Appellate Authority." This amendment shall be effective from a date to be notified
Inserted by s.109 of the Finance (No. 2) Act, 2019 (23 of 2019). This amendment shall be effective from a date to be notified.
Inserted by s.109 of the Finance (No. 2) Act, 2019 (23 of 2019). This amendment shall be effective from a date to be notified.