JANUARY 15, 2020

By Vijay Kumar

SECTION 108(1) of the CGST Act reads as:

108. (1) Subject to the provisions of section 121 and any rules made thereunder, the Revisional Authority may, on his own motion, or upon information received by him or on request from the Commissioner of State tax, or the Commissioner of Union territory tax, call for and examine the record of any proceedings, and if he considers that any decision or order passed under this Act or under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by any officer subordinate to him is erroneous in so far as it is prejudicial to the interest of revenue and is illegal or improper or has not taken into account certain material facts, whether available at the time of issuance of the said order or not or in consequence of an observation by the Comptroller and Auditor General of India, he may, if necessary, stay the operation of such decision or order for such period as he deems fit and after giving the person concerned an opportunity of being heard and after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, including enhancing or modifying or annulling the said decision or order.

This sub-section consists of more than two hundred words cramped into a single sentence paragraph. All that it means is that the Revisional Authority can stay and/or change the order of a lower authority. The Section stipulates that this power includes enhancing the said order. How do you enhance an order? What they meant must be enhancing the amount of tax demanded in the order. It certainly does not mean enhancing the quality of the order reviewed.

Now, who is a Revisional Authority?

Section 2(99) defines "Revisional Authority" as an authority appointed or authorised for revision of decision or orders as referred to in section 108.

But, who is the authority to appoint or authorise this authority? The statute seems to be silent on this.

Recently the CBIC authorised the following officers as "Revisional Authority"

(a)  the Principal Commissioner or Commissioner of Central Tax for decisions or orders passed by the Additional or Joint Commissioner of Central Tax; and

(b) the Additional or Joint Commissioner of Central Tax for decisions or orders passed by the Deputy Commissioner or Assistant Commissioner or Superintendent of Central Tax.

Where did the Board get the authority to authorise these officers? The Notification No. 05/2020-Central Tax ,dated, January 13, 2020 states that -

In pursuance of the provisions of section 5 read with clause (99) of section 2 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act), the Central Board of Indirect Taxes and Customs hereby authorises -

Section 2(99) only defines the "Revisional Authority" and Section 5 states that subject to such conditions and limitations as the Board may impose, an officer of central tax may exercise the powers and discharge the duties conferred or imposed on him under this Act . Does this give the power to authorise an officer as "Revisional Authority"? Board obviously believes so. Let us also do so.

But why do we need a "Revisional Authority"?

If a Commissioner is not happy with an order passed by a subordinate officer, he is free to direct an appeal to the appellate authority. Why should there be another "Revisional Authority" to review the same order? How many processes should one go through before attaining some semblance of clarity? Just look at the judicial (quasi) maze.

Superintendents, Assistant Commissioners, Deputy Commissioners, Joint Commissioners and Additional Commissioners are the adjudicating authorities. Commissioners don't adjudicate as Additional Commissioners have unlimited monetary power to adjudicate. If the orders are passed by Superintendents or Assistant Commissioners or Deputy Commissioners, the Joint Commissioner (Appeals), is the 'appellate authority'. The Commissioner (Appeals) is the 'appellate authority' for orders passed by Joint Commissioners and Additional Commissioners. Against the appellate authority's orders, the appeal lies to the Tribunal and from there to the High Court/Supreme Court. This seems to be a proper appellate channel. Now, somewhere in between appears the "Revisional Authority". The Joint/Additional Commissioners can review the orders passed by Superintendents, Assistant Commissioners and Deputy Commissioners and the Commissioner can review the orders of Joint Commissioners and Additional Commissioners. All these orders are appealable even by the Department. Why then an additional channel of review? What will they achieve? Litigation – unlimited and unending and thoroughly useless.

The complication does not end there. The Commissioner can review the order of the "Revisional Authority" and direct an appeal to the Tribunal [s.112(3) refers]. What happens when the Commissioner himself is the "Revisional Authority"? Will he review his own order?

And the Act came into existence more than thirty months ago. The CBIC appointed "Revisional Authority" only on 13.01.2020. What happened to "Revisional Authority" work all these days? Will they start the revision work now? No hurry; anyway there is no functioning tribunal.

The whole concept seems to be, Justice should not only be not done, but should manifestly and undoubtedly be seen to be not done.

The systems have to be in tune with the law, not vice versa.

Recently, the Delhi High Court observed,

The business activity in the country could not be expected to come to a standstill, only to await the Respondents making the GST system workable. The failure of the Respondents in first putting a workable system in place, before implementing the GST regime, reflects poorly on the concern that the Respondents have shown to the difficulties that the trade faced throughout the length and breadth of the country. Unfortunately, even after passage of over two years, the Respondents have not remedied their omissions and failures by taking corrective steps. They continue to take shelter of the limitations in, and the inability of their software systems to grant refund, despite the same being justified. The rights of the parties cannot be subjugated to the poor and inefficient software systems adopted by the Respondents. The software systems adopted by the Respondents have to be in tune with the law, and not vice versa. The system limitations cannot be a justification to deny the relief, to which the Petitioner is legally entitled. - 2019-TIOL-2918-HC-DEL-GST

GST is supposed to be a technology driven tax and it was campaigned that everything will be online and contact with officers will be almost nil. But what happens if technology fails? Even the Courts, which will have to go by the laws made, are helpless when the taxpayer has to be punished for the incompetence of the machines and the great men who handle them. There used to be a time when merchants used to follow certain conventions to carry out business smoothly and settle disputes. Once societies developed and the need to manufacture GDP statistics became an unavoidable governmental function, the  "Law Merchant"  had to give way to hastily and faultily legislated statutes, which had to be interpreted strictly against the wily merchant and in favour of the holy State, even when the mechanism created by the State fails. As Justice Wilson remarked,  "in almost every nation, which has been denominated free, the state has assumed a supercilious pre-eminence above the people who have formed it. Hence, the haughty notions of state independence, state sovereignty, and state supremacy."

Until next week