Unprecedented Challenge: No GST Appeals in Uttarakhand!
I. Background
In Uttarakhand, the First Appellate Authority has refrained from hearing appeals under Section 107 of the Uttarakhand Goods & Service Tax Act-2017 (UGST) since June 20, 2022, following a judgment by the Hon'ble High Court Nainital in Vinod Kumar Vs. Commissioner Uttarakhand State GST & Other By S.P No.123 of 2022 Dated 20th June 2022.
II. Legal Question Before the High Court
The central question was whether the Assistant Commissioner of GST, whose order was contested, qualifies as an adjudicating authority. The High Court referred to the decision in Radha Krishan Industries Vs State of Himachal Pradesh, emphasizing the definition of "adjudicating authority."
III. Definition of Adjudicating Authority
The court examined Section 2(4) of the UGST Act, defining 'adjudicating authority' as any authority empowered to pass orders under the Act, excluding certain specified authorities. The definition aligned with the Himachal Pradesh Act, where the Supreme Court clarified the scope of adjudicating authority.
IV. Analysis of Assistant Commissioner's Role:
By scrutinizing Sections 3, 5, and 2(91) of the UGST Act, the court concluded that the Assistant Commissioner operates under the control of the Commissioner, lacking independent authority. The court applied the Supreme Court's observation that the Commissioner is not an adjudicating authority, extending it to the Assistant Commissioner.
V. Delegation of Powers and Circular No.1553:
Highlighting Circular No.1553 dated June 30, 2017, the judgment underscored the delegation of powers by the Commissioner to the Proper Officer as the Adjudicating Authority. This was deemed inconsistent with the definition, as the Commissioner cannot function as the adjudicating authority.
VI. Conclusion
The judgment affirmed that only the adjudicating authority, excluding the Commissioner and designated officers, possesses the power to issue orders under UGST. Consequently, appeals under Section 107 can only be filed against orders of the adjudicating authority, not the Proper Officer.
VII. Implications:
The judgment establishes a precise interpretation of the adjudicating authority, restricting appeals to orders passed by designated authorities under UGST. It addresses the improper delegation of powers and reaffirms the hierarchy within the GST framework.
Practical Challenges:
1. The appellate officers, specifically the offices of Additional Commissioner (Appeals) and Joint Commissioners (Appeal), are presently refusing to entertain appeals.
2. Taxpayers are confronted with a binary choice: either acquiesce to the demand and remit the requisite amount or pursue legal recourse by approaching the High Court.
It is imperative for the Uttarakhand Government to expeditiously initiate measures aimed at amending the definition of the Proper Officer and delineating its delegated authority.
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