Delhi HC: GST Commissioner Cannot Invoke S.107(2) to Review Appellate Authority’s Order

As per the Delhi High Court, a Commissioner under the Central Goods and Services Tax Act 2017 cannot, in purported exercise of its powers u/s 107(2), sit in appeal over an order passed by the Appellate Authority.

Under section 107(2), the Commissioner has the authority to call for and analyze the record of any proceedings in which an adjudicating authority has passed an order with the objective of fulfilling its legitimacy.

A division bench of Justices Yashwant Varma and Dharmesh Sharma carried that,

“The Commissioner, while seeking to review an order passed under the Act and in purported exercise of powers vested by Section 107(2), cannot possibly sit over and above an order passed by the appellate authority.”

The applicant in the matter was refused specific refunds through an order dated 14 December 2020.

The appeal of the applicant was permitted by the appellate authority dated 03 January 2022 following which, an order sanctioning refund came to be passed on 09 June 2023.

But the sanction order was set aside vide impugned order dated 24th May 2024 after the commissioner asked to review the same.

It was noted by the High Court that concededly, the Respondent-Department had not assailed the Order on 03 January 2022 which authorized the appeal of the applicant for refunds.

It cited that “That is the position which remains unchanged even till date,” and ruled that the claim for refund cannot be refused at this phase.

Court carried that the refund order passed under an order of the Appellate authority cannot be analyzed via the commissioner in practice of the power of review u/s 107(2). It gives the reason,

“Regard must be had to the fact that the power enshrined in Section 107(2) is concerned with the examination of the record of proceedings which may have been undertaken by an adjudicating authority. It clearly does not contemplate the Commissioner seeking to even attempt to review an order passed by the appellate authority.”

As per that the plea was permitted and the order setting aside the sanction of the refund was quashed.

Appearance: Mr Siddharth Malhotra & Ms Ritika Goel, Advs for Petitioner; Mr Aditya Singla, SSC along with Mr Umagn Misra, Adv for Respondent