Goods & Services Tax (GST) in IndiaNo Power to Remand under Section 107 of CGST Act!

Issues for Determination

1. Whether the First Appellate Authority under Section 107 of the CGST Act has the power to remand the case back to the adjudicating authority.

2. Whether the language of Section 107 allows for an interpretation permitting remand.

Statutory Background

Section 107 of the CGST Act, 2017 governs the appellate mechanism for taxpayers dissatisfied with an order passed by the adjudicating authority. Relevant extracts of the provision are reproduced here:

Section 107(11): “The Appellate Authority shall, after making such 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.”

The language of Section 107(11) explicitly prohibits the First Appellate Authority from remanding a matter back to the adjudicating authority. The First Appellate Authority is required to pass an order either confirming, modifying, or annulling the decision or order appealed against.

He has been entrusted with further inquiry wherever he deems fit, but cannot remand in any manner.

Analysis of Section 107

Interpretation of “confirming, modifying, or annulling”:

The statutory text of Section 107(11) provides the First Appellate Authority with the discretion to adjudicate the appeal by:

• Confirming the original order (upholding the decision of the adjudicating authority),
• Modifying the original order (changing the quantum of tax, penalty, or other aspects), or
• Annulling the original order (setting aside the decision entirely).

The use of the words “shall not refer the case back” indicates a clear legislative intent to bar the power of remand. By explicitly prohibiting remand, the legislature has intended for the Appellate Authority to decide the matter conclusively based on the material available and the inquiries conducted.

1.M/S Kronos Solutions India Private Limited Respondent Vs. Union Of India And  Others(All.) (WRIT TAX No. – 1417 of 2023 – Neutral Citation  No. – 2024: AHC:16550-DB), the Court held that;

“7.Undeniably, the appeal authority may either confirm or modify or annul the order under appeal. In face of statutory prescription allowing for only three above described options to the appeal authority, no inherent power may remain be exercised by the appeal authority to set aside the order under appeal and remand the proceedings to the original authority. Any doubt in that regard has been clarified by the legislature itself by stating that the appeal authority shall not refer the matter back to the adjudicating authority”

2. Tvl. SHIVAM Steels Vs.Assistant Commissioner (ST)(FAC), Hosur South-III – (2024) 20 Centax 363 (Mad.) It was held that;

“8…..The appellate authority under applicable GST statutes does not have the power to remand…”

Legislative Intent and Principle of Expressio Unius Est Exclusio Alterius

The legislative intent behind Section 107(11) is explicit. The principle of Expressio Unius Est Exclusio Alterius (the expression of one thing excludes others) applies here.

By expressly allowing the appellate authority to “confirm,” “modify,” or “annul” the order, and simultaneously barring remand, the legislature has excluded the possibility of remand.

Any interpretation to the contrary would render the embargo of remand to be redundant since still under the garb of some or the other orders have been passed for certain determination by lower authorities and it amounts to remand in the first place even when the word “remand” or “de-novo” is not written in the body of the order.