S.107 CGST Act | GST Appellate Authority Can Conduct Further Inquiry, Permit Cross-Examination: Delhi High Court

The Delhi High Court has held that the appellate authority under Section 107 of the Central Goods and Services Tax (CGST) Act, 2017 is empowered to conduct such further inquiry as may be necessary while deciding an appeal and, in an appropriate case, can permit cross-examination of witnesses, notwithstanding the statutory bar on remanding matters to the adjudicating authority.

The Division Bench of Justices Anil Kshetarpal and Shail Jain made the observation while refusing to entertain a writ petition challenging GST demand of approximately ₹64 crore on the ground that Petitioner had been denied an opportunity to cross-examine witnesses during the adjudication proceedings.

The petitioner argued that since Section 107(11) bars the appellate authority from remanding a matter to the adjudicating authority, the High Court should entertain the writ petition because no opportunity to cross-examine witnesses had been afforded during the adjudication proceedings.

Rejecting the contention, the Court noted that while Section 107(11) prohibits the appellate authority from remanding a matter, it expressly empowers it to undertake further inquiry before deciding the appeal. It observed,

"A plain reading of the aforesaid provision indicates that although the Appellate Authority cannot remand the matter to the Adjudicating Authority, it is expressly empowered to undertake such further inquiry as may be necessary before deciding the appeal. Such power is sufficiently wide to enable the Appellate Authority, in an appropriate case, to permit cross-examination of witnesses wherever it considers the same necessary for a just adjudication."

The court further held that as the first appellate forum, the appellate authority possesses wide powers to confirm, modify or annul the impugned order and is competent to examine both factual and legal issues, including the petitioner's grievance relating to denial of cross-examination.

In view of the efficacious statutory remedy, the High Court disposed of the petition.

For Petitioner: Advocates Rupesh Sharma, Kartik Jindal, Alekshendra Sharma, Palak Gupta, Mukul Tyagi, Advocates.

For Respondent: Siddhartha Shankar Ray, Sonali Modi, Mukul Dev, Advocates for R-1; Anushree Narain, Naman Choula, Apurv Yadav