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GST Appellate Authority Lacks Power to Remand Matter Back to Adjudicating Authority

Issue

Whether the First Appellate Authority under Section 107 of the GST Act has the statutory power to remand a matter back to the Adjudicating Authority for fresh decision upon finding that the original order travelled beyond the Show Cause Notice (SCN).

Facts

Refund Claim & SCN: The petitioner filed a refund claim under Section 54, which was subsequently rejected by the Adjudicating Authority following the issuance of a Show Cause Notice (SCN).
First Appeal: The petitioner filed an appeal before the Appellate Authority under Section 107, contending that the Adjudicating Authority’s rejection order travelled beyond the scope of the SCN.
Remand Order: The Appellate Authority accepted the petitioner’s contention that the order transgressed the SCN, but instead of deciding the appeal, it remitted/remanded the matter back to the Adjudicating Authority.
Writ Challenge: The petitioner challenged the Appellate Authority’s remand order before the High Court on the ground that the GST Appellate Authority lacks statutory jurisdiction and power to remand proceedings back to the lower authority.

Decision

Absence of Remand Power: The statutory framework under Section 107 of the CGST/PGST/HGST Act does not confer appellate jurisdiction or power on the First Appellate Authority to remand a matter back to the original Adjudicating Authority [In favour of assessee].
Statutory Duty of Appellate Forum: The Appellate Authority is statutorily required to decide the appeal on its merits by confirming, modifying, or annulling the impugned order within the four corners of the law [In favour of assessee].
Quashing of Remand Order: The impugned remand order was unsustainable and set aside. The Appellate Authority was directed to re-visit and adjudicate the issue itself in accordance with law [In favour of assessee].

Key Takeaways

No Statutory Power to Remand: Unlike the legacy tax regimes, Section 107 of the CGST/SGST Act consciously omits the power of the First Appellate Authority to remand cases back to the Adjudicating Authority.
Obligation to Decide on Merits: When a procedural defect or order exceeding the SCN is identified at the first appellate stage, the First Appellate Authority must annul, modify, or confirm the order itself rather than remitting it back for a fresh round of adjudication.

HIGH COURT OF PUNJAB & HARYANA

William E Connor and Associates Sourcing (P.) Ltd.

Commissioner of CGST

Ashwani Kumar Mishra, CJ.
and Rohit Kapoor, J.

CWP-30207-2024 (O & M)

SEPTEMBER 15, 2026

Ms. Krati Singh and Ms. Samiksha Uniyal, Advs. for the Petitioner. Ajay Kalra, Sr. Standing Counsel and Ms. Isha Janjua, Adv. for the Respondent.

ORDER

Ashwani Kumar Mishra, CJ. – This petition is directed against the order dated 29.08.2024 (Annexure P-1) passed by the Appellate Authority, whereby the matter in issue has been remitted back for fresh consideration by the adjudicatory authority.

2. The order primarily is assailed on the ground that statute itself does not contemplate jurisdiction with the Appellate Authority to remand the proceedings.

3. Section 107(11) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the Act’) provides as under :-

Section 107. Appeals to Appellate Authority.-

(11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order:

xxxx xxxx”

4. The aforesaid provisions contains specific embargo denying the Appellate Authority an opportunity to remand back the matter to the adjudicatory authority.

5. The short question that arises to the facts of the present case is as to whether the Appellate Authority could have remanded the matter to the adjudicatory authority ?

6. It transpires that a claim for refund was instituted by the petitioner under Section 54 of the Act, which was rejected by the adjudicatory authority. The order of the adjudicatory authority was pursuant to show cause notice issued on 04.05.2023. The petitioner challenged the order of the adjudicatory authority primarily on the ground that the order of the authority transgressed the limits of the show cause notice, and therefore, the order was barred. The Appellate Authority has found substance in such contention and has consequently remitted the matter.

7. We are of the view that once the statute does not vest jurisdiction with the Appellate Authority to remand the proceedings back to the adjudicatory authority by virtue of Section 107(11) of the Act, it was not open for the Appellate Authority to pass such an order. The Appellate Authority was expected to adjudicate the appeal within the four corners of law and pass appropriate order other than the order of remand.

8. Since this has not been done, therefore, the order dated 29.08.2024 (Annexure P-1) cannot be sustained. This petition consequently succeeds and is allowed. The impugned order dated 29.08.2024 (Annexure P-1) passed by the Appellate Authority is set aside. The Appellate Authority is directed to re-visit the issue keeping in view the applicable provisions of law and the observations made as above.

9. All pending miscellaneous application(s), if any, shall also stand disposed of.

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