GST Appeals FAQs — Section 107 Procedure, Pre-deposit & GSTAT
7 expert answers on GST Appeals under Sections 107 & 112 under GST — eligibility, restrictions, reversals, and recent legal positions.
These questions are drawn from real GST compliance scenarios, litigation, and common queries from practitioners. Answers reflect the law as amended up to Finance Act 2024.
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Under Section 107(6), an appeal under Section 107 is not admitted unless the appellant deposits 10% of the tax, interest, fee, fine or penalty arising from the impugned order (in addition to tax admitted to be due). For appeals against orders under Sections 129 and 130 (detention and confiscation of goods), the pre-deposit is 25% of the penalty. The pre-deposit amount is adjusted against the final liability if the appeal is decided against the appellant.
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An appeal under Section 107 must be filed within 3 months of the date of communication of the order. The Appellate Authority may condone the delay for a further period of 1 month (total 4 months) if sufficient cause is shown. Beyond 4 months, the Appellate Authority has no power to condone the delay — the appeal is time-barred. However, High Courts have in some cases entertained writ petitions where the delay was caused by factors beyond the taxpayer's control (e.g., portal glitches, medical emergency of the authorised signatory).
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Yes. Section 107(6) provides that where the Appellate Authority is satisfied that the recovery of the outstanding demand would cause undue hardship to the taxpayer, it may stay recovery of the balance amount during pendency of the appeal. Additionally, once a valid appeal is filed with the mandatory pre-deposit, Section 78 gives a 3-month window before recovery commences, effectively providing breathing room. Courts have also granted ad-interim stay of recovery while hearing writ petitions against appeal orders.
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The GST Appellate Tribunal (GSTAT) is established under Section 109 of the CGST Act as the second appellate forum. After an unfavourable order from the Appellate Authority under Section 107, a further appeal lies to GSTAT under Section 112. GSTAT began functioning in 2024. The additional pre-deposit for a Section 112 appeal is 20% of the remaining disputed tax — so the total amount deposited to reach GSTAT is effectively 25% of the disputed tax (10% + 20% of the remaining 90%).
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High Courts have jurisdiction under Article 226 of the Constitution to entertain writ petitions against GST orders even where a statutory appeal remedy exists. However, courts have consistently held that writ petitions should not be filed as a substitute for statutory appeals — particularly where disputed factual questions are involved. Writs are generally entertained only where: the impugned order is passed without jurisdiction, there is a clear violation of natural justice, the SCN/order is ex-facie void, or where the statutory appeal remedy is shown to be inadequate.
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Section 107(9) mandates that the Appellate Authority shall pass the order within 1 year from the date of filing of the appeal. However, the section does not prescribe automatic dismissal or any other consequence for delay. Courts have held that the 1-year period is directory, not mandatory — the appeal does not lapse even if no order is passed within a year. Taxpayers facing inordinate delay can file a writ of mandamus directing the Appellate Authority to decide the appeal within a specified timeframe.
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Yes, but only after notice. Section 107(2) provides that the Appellate Authority may, after hearing the appellant, examine the record of proceedings and may pass an order modifying, annulling, or confirming the order appealed against. Section 107(3) further empowers the AA to enhance the assessment, but only after issuing a notice to the appellant and giving an opportunity to be heard — it cannot enhance the demand suo motu without such notice.