JULY 15, 2024

By Mr M G Kodandaram, IRS, Assistant Director (Retd), ADVOCATE and CONSULTANT

AN authorised representative is a person approved by a GST-registered person to act on his behalf in departmental proceedings, particularly during personal hearings of litigated issues on which notice has been issued by the authorities. According to Section 116 of the CGST Act, "Any person entitled or required to appear before an officer appointed under this Act, or before the Appellate Authority or the Appellate Tribunal in connection with any proceedings under this Act, may, unless required under this Act to appear personally for examination on oath or affirmation, and subject to the other provisions of this section, appear by an authorized representative."

Section 116(2) of the CGST Act specifies the categories of individuals who can be authorized to represent a person.

They include:

(1) A regular employee of the person.

(2) A relative or family member of the person.

(3) A practicing advocate in any Indian court, provided they are not debarred from practicing law in any court in India.

(4) A chartered accountant, company secretary, or cost accountant who holds a certificate of practice and has not been banned from their profession.

(5) A retired officer from the Department with mandated eligibility.

(6) A GST practitioner.

This means that anyone required to appear before an appointed officer, the Appellate Authority or the Appellate Tribunal under this Act may designate another person to represent them, subject to the provisions of this section. In simple terms, an authorised representative can appear on behalf of a person in proceedings under GST law before the stated authorities. There are specific situations that lead to the disqualification of certain authorized representatives in such proceedings, including misconduct, removal from government service, and convictions under specified Acts. These disqualifications occur only after the person is proven guilty. According to Section 116(3) of the CGST Act, the following individuals are not qualified or allowed as authorized representatives under GST:

(1) Those who have been removed or dismissed from government service.

(2) Those who have committed an offense related to any proceedings in GST laws related to the supply of services or goods or both, or on the sale of goods.

(3) Those found guilty of misconduct by the prescribed authority.

(4) Those declared insolvent.

(5) Anyone barred under GST laws.

Typically, an authorisation letter issued by the registered person to their representative suffices under stated laws, as there is no specific format, fee or requirement for the use of bond paper stipulated under the GST laws. This aligns with the objective of the GST system, which aims to establish a simplified voluntary compliance regime.

It has been observed that some authorities are implementing their own procedures and forms, which can vary significantly from State to State and even from officer to officer. This inconsistency creates significant challenges and confusion for those seeking justice, as they must steer the differing requirements and procedures that are not standardized across the regime. These discrepancies destabilize the uniform approach intended by the GST framework. Furthermore, the arbitrary and unauthorized methods adopted by officials become obstacles for taxpayers and their representatives. In many cases, eligible practitioners with proper authorization from the notice are not heard due to non-compliance with the unintended procedures of the officer concerned. Would it not be appropriate for the GST Council to ensure uniformity in all such proceedings by the authorities through the adoption of digital means?

Further, the authorities are discouraging e-hearing as against the instructions by CBIC in this regard. The CBIC issued instructions on 27 April 2020 introducing e-hearing via video conferencing for matters pending before Adjudicating, Appellate, and Compounding Authorities under the Customs Act, 1962, the Central Excise Act, 1944, and Chapter V of the Finance Act, 1994. These instructions provided broad guidelines for conducting virtual hearings to expedite pending proceedings. Based on feedback from Trade and Field Formations, the CBIC issued updated instructions on 21 August 2020, extending e-hearing facilities to proceedings under the Central Goods & Services Tax Act, 2017, and the Integrated Goods & Services Tax Act, 2017. Personal hearings through video conferencing were made mandatory, except in rare and exceptional circumstances involving the taxpayer or authorized representative.

However, in practice, e-hearings via video conferencing have become infrequent, despite instructions from the Board, as departmental authorities often insist on physical hearings. This discrepancy is evident when comparing data on virtual versus physical hearings conducted to date. Officers require the notified person to attend either in person or through an unauthorized representative, showing reluctance to conduct hearings virtually. This trend may extend to the GST Tribunal once established and operational. It is crucial for the GST Council to mandate procedures to conduct hearings exclusively via video conferencing, except in exceptional circumstances where written approval from a senior officer citing valid reasons for a physical hearing is obtained.

In this regard, it is emphasized that the GST Council should reconsider all the above-mentioned issues. Regarding authorized representatives appearing in GST matters, proper forms and procedures in digital formats should be prescribed. Authorities should also be required to transition to e-hearings exclusively. Legal measures, such as introducing new rules, forms, and digital procedures, should be considered to ensure that dispute resolution becomes simpler and more transparent.

[The views expressed are strictly personal.]