Appeal Without Remedy: GST Appellate System's Fatal Flaw

When the Goods and Services Tax (GST) launched in July 2017, policymakers hailed it as a "good and simple tax" to streamline compliance and unify India's fractured indirect tax landscape. Eight years later, however, a glaring procedural defect in its appellate framework forces taxpayers into a grim dilemma: accept flawed orders or endure endless restarts. Under Section 107(11) of the Central Goods and Services Tax Act, 2017, appellate authorities can confirm, modify, or annul appealed orders—but they lack the power to remand cases back to the original adjudicator for fresh consideration after fixing defects. This omission, seemingly innocuous on paper, creates a procedural dead-end that erodes taxpayer rights, overwhelms higher courts, and sabotages the promise of swift dispute resolution.Appeals exist not merely to affirm or reverse outcomes, but to rectify errors like denied hearings, overlooked evidence, or misapplied law. Logically, such flaws demand remand for proper re-adjudication. Yet GST bucks this norm across Indian tax law: Section 251(1)(a) of the Income Tax Act empowers remands; the U.P. VAT Act, 2008, and several state VAT regimes permitted them; even pre-GST service tax and central excise appeals allowed it through Commissioner (Appeals). GST stands alone, trapping authorities in a binary trap—uphold the defect-ridden order or quash it, prompting the tax department to relaunch proceedings from zero. Both paths breed inefficiency and expense.In practice, thousands of ex parte GST orders emerge annually from show cause notices and adjudications, often due to GSTN portal glitches, faulty communication (wrong emails or addresses), or rushed deadlines post-pandemic extensions. A well-intentioned appellate body cannot simply remand for a fair hearing; quashing offers taxpayers a hollow win, as fresh notices restart the grind. High Courts have stepped in via Article 226 writs—Calcutta HC in LGW Industries Ltd. v. Union of India (2021) insisted procedural fairness overrides statutory silence, while Allahabad HC in Shiv Enterprises v. State of U.P. (2022) mandated remands for natural justice breaches. But constitutional remedies cannot substitute routine appellate functions; they merely burden judicial bandwidth.Globally, tax appellate systems embrace remand as standard: the UK's First-tier Tribunal (Tax) remits with directions; Australia's AAT cures defects without full relitigation; the U.S. Tax Court sends incomplete cases back to the IRS. India's GST regime, by contrast, presumes appellate infallibility—an unrealistic premise.The delayed GST Appellate Tribunal (GSTAT), slated for late 2025 operations, inherits this flaw unless Sections 107(11) and 113 align to enable remands. Absent reform, it risks amplifying High Court overloads.The fallout is stark: ballooning litigation as cases ping-pong between forums; revenue delays from quashed orders; eroded taxpayer trust fueling non-compliance; and departmental backlogs diverting focus from evasion.Targeted fixes are straightforward. Amend Section 107(11) to insert: "...or remand the case, with or without directions, to the authority which passed such decision or order for reconsideration." Harmonise GSTAT powers under Section 113. Introduce a 30-day pre-appeal "defect cure" window for administrative fixes, alongside GSTN upgrades for reliable notice delivery via email/SMS and dashboards.GST now demands such refinements. Without remand restoration, the GSTAT launches hobbled, High Courts play appellate enforcers, and frustration breeds defiance. This is no taxpayer perk—it's essential for a credible system that bolsters voluntary compliance and safeguards revenue.Restoring remand powers transforms "One Nation, One Tax" from slogan to reality: fair, efficient, and just.The Author is a Law Student at Delhi University. Views Are Personal

Appeal Without Remedy: GST Appellate System's Fatal Flaw

Kaustubh Tripathi

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