An appeal is not a second chance to build a case. It is a review of a record that already exists. The quality of that record was fixed at the reply stage. What the appeal adds is structure, legal argument and, where permitted, additional evidence.
The appellate structure
Stage | Provision | Time limit | Pre deposit |
|---|---|---|---|
First appeal to the Appellate Authority | Section 107 | Three months from communication of the order, extendable by one month on sufficient cause | Ten per cent of the tax in dispute, in addition to the admitted liability |
Appeal to the Appellate Tribunal | Section 112 | Three months from communication of the order, subject to the notified date of constitution | A further percentage of the tax in dispute, subject to the prescribed ceiling |
Appeal to the High Court | Section 117 | One hundred and eighty days | As directed |
Appeal to the Supreme Court | Section 118 | As provided | As directed |
Pre deposit
The first appeal requires payment of the admitted liability in full, along with ten per cent of the remaining amount of tax in dispute. Interest and penalty are not included in the base for computing the pre deposit. The deposit is a condition of maintainability, so it should be arranged before the last date rather than on it.
Before deciding to appeal
Four questions are worth settling before the appeal is drafted.
Is the defect one that rectification under section 161 can correct? An error apparent on the face of the record is faster and cheaper to fix through rectification.
Is the demand partly acceptable? Accepting the acceptable part reduces the pre deposit and improves credibility on the contested part.
What grounds are already on record? Grounds not taken earlier will need to be explained.
Is the issue recurring across periods? If so, the appeal should be drafted with the later periods in view, since the reasoning will be applied to them.
Drafting the grounds
Grounds should be specific and self contained. A well drafted ground states the finding, the error and the consequence.
Begin with jurisdictional and limitation grounds, where available
Follow with grounds on natural justice, such as failure to consider the reply or to grant a hearing
Then take the merits, issue by issue, with the statutory provision and the supporting material identified
Deal expressly with each adverse finding rather than arguing the case generally
Keep penalty grounds separate from the tax grounds, since penalty involves a distinct test
The paper book
A well organised paper book carries more weight than the length of the grounds.
Index with page numbers
Impugned order
Show cause notice and the reply, with its annexures
Reconciliation workings, where figures are in dispute
Documents relied upon, arranged in the order they are referred to
Copies of decisions relied upon, with the relevant paragraphs marked