Facts of the Case:

In this case, the petitioner challenged an Order-in-Appeal dated 20.05.2024 passed under Section 107 of the CGST/WBGST Act, whereby the Appellate Authority, while partly accepting the petitioner’s contentions regarding admissible Input Tax Credit (ITC), directed the petitioner to appear before the Adjudicating Authority for verification of documents and settlement of the matter.

The original adjudication order had been passed ex parte under Section 73(9), confirming a demand of ₹18.19 lakh towards tax, interest and penalty for FY 2017-18 on account of alleged short payment of tax and excess availment of ITC. Contending that Section 107(11) expressly prohibits remand by the Appellate Authority, the petitioner filed a rectification application under Section 161, which was rejected as time-barred. Aggrieved, the petitioner approached the High Court, challenging both the remand direction and the rejection of the rectification application.

Issue:

Whether the Appellate Authority exercising powers under Section 107 of the CGST/WBGST Act is empowered to remand a matter to the Adjudicating Authority despite the express prohibition contained in Section 107(11).

Held That:

The Calcutta High Court held that Section 107(11) unequivocally bars the Appellate Authority from remanding a case to the Adjudicating Authority. The Court observed that the Appellate Authority has only three statutory options to confirm, modify or annul the order appealed against and if further inquiry is required, it must undertake or cause such inquiry itself before deciding the appeal.

Having already recorded findings in favour of the petitioner regarding reversal of excess ITC, the Appellate Authority was required to finally adjudicate the appeal instead of directing the petitioner back to the original authority. The Court further held that a remand order passed contrary to the express statutory prohibition is without jurisdiction and constitutes a nullity. Such a jurisdictional defect cannot be cured merely because the rectification application was dismissed on limitation or because an alternative appellate remedy may exist. Accordingly, the Court set aside both the remand direction contained in the Order-in-Appeal and the order rejecting the rectification application, and remitted the matter to the Appellate Authority for fresh adjudication strictly in accordance with Section 107(11), without remanding the case to the Adjudicating Authority.

Case Name: Shyam Traders v. State of West Bengal dated 09.07.2026

To read the complete judgement 2026 Taxo.online 2043