The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 207/1/2024-GST, dated June 26, 2024 (download), addressing the reduction of government litigation by setting monetary limits for filing appeals by the Department before various judicial bodies such as GSTAT, High Courts, and the Supreme Court.
Objective
The National Litigation Policy aims to optimize judicial resource utilization and expedite the resolution of pending cases by encouraging prudent litigation practices. Specifically, it sets thresholds below which appeals should not be pursued unless specific conditions apply.
Key Highlights
- Monetary Limits for Filing Appeals: The following outlines the monetary thresholds below which appeals shall not be filed:
- GSTAT – 20,00,000
High Court – 1,00,00,000
Supreme Court – 2,00,00,000
- GSTAT – 20,00,000
- Principles for Determining Applicability of Limits:
- Aggregate Amount: In cases involving tax demands, the combined amount of CGST, SGST/UTGST, IGST, and Compensation Cess is considered.
- Interest, Penalty, and Late Fee: The respective amounts are considered separately when only interest, penalty, or late fee is in dispute.
- Erroneous Refund: The disputed refund amount is considered.
- Composite Orders: For orders covering multiple appeals or demand notices, the total amount is considered.
- Exclusions: Appeals can still be filed irrespective of the monetary limits in the following cases:
- Constitutional Validity: Cases where a provision of the CGST Act or related acts is declared ultra vires.
- Recurring Issues: Issues involving valuation, classification, refunds, or place of supply.
- Adverse Comments: Cases involving strictures or adverse comments against the Government.
- Interest of Justice: Any case where it is deemed necessary by the Board.
- Special Provisions:
- Non-filing of appeals due to monetary limits does not set a precedent.
- Officers are instructed to record reasons for not filing appeals in such cases.
- Departmental representatives must inform judicial bodies that non-filing is due to the monetary limits, not acceptance of the decision.
Monetary Limit
| Appellate Forum | Monetary Limit (in Rs.) |
| GSTAT | 20,00,000 |
| High Court | 1,00,00,000 |
| Supreme Court | 2,00,00,000 |
Note that this limit is for Department’s appeal to avoid litigation in various cases. But, there are exception where the department can file appeal irrespective of the monetary limit. These exceptions, i have already stated above.
Table Summary of Principles for Filing Appeals
| Dispute Type | Consideration for Monetary Limit |
|---|---|
| Tax Demand | Aggregate of tax amount in dispute |
| Interest Only | Amount of interest in dispute |
| Penalty Only | Amount of penalty in dispute |
| Late Fee Only | Amount of late fee in dispute |
| Interest, Penalty, Late Fee (No Tax) | Combined amount of interest, penalty, and late fee |
| Erroneous Refund | Amount of refund in dispute |
| Composite Orders | Total amount involved in multiple appeals/notices |
This circular aims to reduce unnecessary litigation, thus ensuring a more efficient and predictable tax environment. It reflects a balanced approach by setting thresholds while allowing flexibility for significant or recurring issues.
