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What to do if you have paid penalty under GST – Contest your case at Appeal Level


What to do if you have paid penalty under GST – Contest your case at Appeal Level

Almost a year has gone, real work under GST begins now. It has been brought to notice that many taxpayers are being penalized for one or the other contravention of act. But since Goods and Services Tax Act is a new law and certainly has interpretational issues, a taxpayer who does not agree with the penalty charged or tax recovered by the proper officer can prefer an appeal with the Appellate Authority. As per section 107 of the Central Goods and Services Tax Act, 2017 an appeal can be filed within 3 months from the date of communication of order. There is no specific category of orders/intimation which are appealable, rather any order can be appealed by the taxpayer, except those specifically provided in clause (a) to Clause (d) of section 121. The orders not appealable as per section 121 are as follows:

a) An order of transfer of proceedings from one officer to other
     b) Order pertaining to seizure and retention of books of accounts and records
     c)An order sanctioning prosecution under GST
     d) Order for payment of tax and other amounts in installment.

Apart from above four, a taxpayer can prefer an appeal against the order passed by the adjudicating officer.

But there are few questions which needs to be answered:

1. Where the goods are in transit and seizure is made in some other state than the state of registration. In which state the appeal shall be filed?
For instance the company registered in Delhi causing movement of goods to Mumbai. The vehicle is inspected in Rajasthan and found carrying deficient documents. The officer passes the order for levy of penalty. In such a case the appeal shall be filed by the person causing the movement, in the state in which it is registered i.e. in Delhi. Since Delhi forms his jurisdictional office, no appeal shall be filed in Rajasthan although the penalty has been charged in that state.  
But where the jurisdictional officer of the taxpayer is a state authority, in that case an appeal shall be filed with the Central Commissioner and not with State Commissioner. Where an order has been passed by the central Commissioner Appeals, the same shall also be enforceable against the state authority due to cross-empowerment.

2. In how much period does the appeal needs to be filed by taxpayer?
An Appeal can be filed within three months from the date of communication of order to the taxpayer. Verbal communication will not be treated as legal service of notice. The order needs to be served to the taxpayer at his registered principal place or additional place of business.  

3. Amount of pre-deposit to be made before filing of appeal?
An Appeal shall be filed after full deposit of the amount (tax/interest/fees/penalty/fine/fees etc.) accepted by the taxpayer and 10% of the amount (tax not penalty/interest/fine/fees etc.) under dispute.  Once this deposit is made, a stay on recovery proceedings shall be automatically granted. No separate application for stay of recovery proceeding needs to be made.

4. Is order of detention or seizure of transport vehicle appealable under court of law?
In GATI-KINTETSU EXPRESS PRIVATE LIMITED VERSUS ASSISTANT COMMISSIONER OF STATE TAX, KHARAGPUR RANGE & OTHERS, Calcutta High Court has held that Section 107 of the Act allows any person aggrieved by any decision or order passed under the Act of 2017 or the State Goods and Services Tax Act to file an appeal before the appellate authority as may be prescribed. Section 121 is an exception to Section 107 of the Act. While Section 107 of the Act makes every decision or order passed under the Act of 2017 to be appealable, Section 121 makes an exception thereto and states that, few which are recognized in Sub-section (a) to (d) would not be appealable. 

The petitioner has a statutory alternative remedy available. It would be appropriate to permit the petitioner to prefer an appeal from the impugned order before the designated appellate authority, either electronically or otherwise.

As per the above order of H’ble Court it has been held that what is barred from appeal u/s 129 is the seizure and detention of books of accounts and records but not the vehicle detained and seized by the officer. The court held that the detention of vehicle is an appealable order u/s 121 of the Act. Therefore where vehicle is detained due to reasons not permitted under law, an appeal can be made with the Appellate authority

5. What are the forms to be filed along with procedure?
For filing of an appeal, taxpayer needs to file form GST APL -01 electronically or through facilitation centre within 3 months of date of communication of order. Upon submission of GST APL-01, a provisional acknowledgment shall be issued.

Thereafter a certified copy of the decision or order appealed against shall be submitted within seven days of filing of the appeal. Once it is submitted, a final acknowledgement indicating appeal number shall be issued in FORM GST APL-02. The date of filing of appeal in such case shall be the date of issue of provisional acknowledgement.

Where the certified copy of the decision is not submitted within seven days, in such case the date of filing of appeal shall be the date on which such certified copy is submitted.  

Thanks and Regards

Keshav R Garg
(B.Com, FCA, CS, ISA(ICAI))
Author: Bharat's GST Ready Reckoner
            A Handbook on GST
Member: Indirect Tax Committee of CII, 
Founder: MyGst.MyTax Foundation
Adviser: Industries Association of Chandigarh
Adviser: Chambers of Chandigarh Industries

Address: 3328, First Floor, Sector 27 D, Chandigarh, India - 160 019
Phones: +91-172-461-3328, +91-98880-90008




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