QUESTION

What are the implications of Section 107(11) of CGST Act? Whether the 1st appellate authority, under his powers to modify the order, can go beyond the allegations in the SCN and the grounds on which the adjudicating authority has passed order and decide the case?

ANSWER

Facts of the Case:
Whether the Appellate Authority u/s 107(11) can pass an order to modify an order appealed against on new grounds and go beyond the grounds on which adjudicating authority decided the case.

Law Applicable:
Sub section 10 of section 107 CGST dictates that;

"(10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable."

Interpretation:
As per Rule 108(2), the grounds to appeal shall be submitted in form GST APL-01 to appellate authority for filing an appeal against the order passed by adjudicating authority. The form shall contain in detail the grounds on which the appeal shall be proceeded and decided with.
The appellate authority is bound by this form and shall decide the case based on these grounds after giving parties an opportunity of being heard.
Sub section (10) to section 107 empowers the appellate authority to allow the appellant to add any grounds, at the time of hearing and appeal, that were not mentioned in form GST APL-01 in grounds to appeal earlier.

Conclusion:
Therefore, an appellate authority may go beyond the grounds mentioned earlier in APL-01 if the authority is satisfied that omission was not willful and the appellant has been given an opportunity to submit additional grounds u/s 107(10). (Reply dt. 27/01/2022)