Commissioner's Approval Alone Cannot Sustain Departmental Appeal Below ₹20 Lakh: GSTAT Ghaziabad

On 1 October, the Goods and Services Tax Appellate Tribunal (GSTAT), Ghaziabad, held that a departmental appeal cannot be maintained when the disputed tax demand is below the prescribed monetary limit unless the Revenue establishes a recognised exception to the limit.

A Division Bench comprising Judicial Member Dr. Sanjay Kumar Chandhariyavi and Technical Member Sungita Sharma dismissed the Revenue's appeal involving a disputed amount of Rs. 11.88 lakh at the threshold, without examining its merits. The Tribunal observed:

“No material shows that the Commissioner specifically exercised the residual power, with reasons relating to this case, so as to bring the appeal within an exception. A mere statement that the Commissioner has approved or authorised the appeal cannot replace compliance with the statutory provisions and binding litigation policy.”

Section 120 of the Uttar Pradesh Goods and Services Tax Act empowers the Commissioner to prescribe monetary limits for departmental appeals. Pursuant to this provision, Uttar Pradesh has prescribed a Rs. 20 lakh monetary limit for departmental appeals before the GSTAT, subject to specified exceptions.

In the present case, the Revenue sought to maintain the appeal under Section 112(3) with the Commissioner's permission, despite the disputed amount being below the prescribed monetary limit. The Revenue was required to identify and establish the specific exception relied upon.

The Tribunal found that a mere statement that the appeal had been filed with the Commissioner's permission was insufficient to establish an exception. The Revenue failed to show that the appeal involved any recognised exception, such as a constitutional challenge, invalidation of a rule or circular, a recurring question of law, or a recorded decision by the Commissioner to contest the specific case in the interest of justice or revenue.

Accordingly, the GSTAT dismissed the appeal as not maintainable since the disputed amount of Rs. 11.88 lakh was below the prescribed Rs. 20 lakh limit and no exception was established. It clarified that it had not examined or decided the merits of the tax dispute and that the dismissal was confined to the applicable monetary-limit policy.