Commissioner Cannot Use Its Power U/S 107(2) CGST Act To Review Order Passed By Appellate Authority: Delhi High Court

The Delhi High Court has made it clear that a Commissioner under the Central Goods and Services Tax Act 2017 cannot, in purported exercise of its powers under Section 107(2), sit in appeal over an order passed by the Appellate Authority. Section 107(2) empowers the Commissioner to call for and examine the record of any proceedings in which an adjudicating authority has passed any order, for the purpose of satisfying himself of its legality. A division bench of Justices Yashwant Varma and Dharmesh Sharma ruled, “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.” In the case at hand, the Petitioner was denied certain refunds vide order dated 14 December 2020. The Appellate Authority allowed the Petitioner's appeal on 03 January 2022 following which, an order sanctioning refund came to be passed on 09 June 2023. This sanction order was however set aside vide impugned order dated 24 May 2024, after the Commissioner sought to review it. The High Court noted that concededly, the Respondent-Department had not assailed the Order dated 03 January 2022 which allowed Petitioner's appeal for refunds. “That is the position which remains unchanged even till date,” it said and ruled that the claim for refund could not be denied at this stage. The Court also held that the refund order, passed in pursuance of an order of the Appellate Authority, could not be reviewed by the Commissioner in exercise of its power of review under Section 107(2). It reasoned, “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.” Accordingly, the appeal was allowed and order setting aside the sanction of 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 Case title: M/S G.S Industries v. Commissioner Of Central Tax And Gst, Delhi (West)Citation: 2025 LiveLaw (Del) 5 Case no.: W.P.(C) 13149/2024 Click Here To Read/Download The Order

Commissioner Cannot Use Its Power U/S 107(2) CGST Act To Review Order Passed By Appellate Authority: Delhi High Court

Kapil Dhyani

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