In the labyrinthine world of GST litigation, one deceptively simple question has generated considerable jurisprudential heat: can the First Appellate Authority (FAA) under the GST law remand back a matter to the original adjudicating authority? The answer, as with many things in Indian tax law, is neither straightforward nor settled, though the weight of authority has now shifted decisively in one direction. This post dissects the statutory provisions, competing interpretations, and the rapidly crystallising judicial consensus on this issue.

The Legal Framework: What the Statute Says

The power of the First Appellate Authority flows primarily from Section 107 of the Central Goods and Services Tax Act, 2017 (CGST Act). Sub-section (11) of Section 107 sets out the scope of powers available to the FAA upon hearing an appeal:

“The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order.” Section 107(11), Central Goods and Services Tax Act, 2017  —  Read full Act on CBIC ↗

Note the critical phrase: the statute does not merely omit remand. It expressly prohibits it. Section 107(11) contains a mandatory bar: the FAA “shall not refer the case back to the adjudicating authority.” This is an affirmative legislative choice, not a drafting gap.

Compare this with analogous provisions under the erstwhile Central Excise Act, 1944 and the Finance Act, 1994 (service tax), which expressly conferred remand powers on appellate authorities. The conscious departure from that template in the CGST Act is significant and has attracted sustained judicial scrutiny.

The Case for Implied Remand Power

Despite the express prohibition, some appellate authorities and a handful of early judicial decisions argued for a more flexible reading. Their case rested on several grounds:

1. The “just and proper” clause as a residuary power

The expression “as it thinks just and proper” in Section 107(11) was argued to be wide enough to encompass a remand in exceptional circumstances, for instance, where the original order was entirely non-speaking, or where no opportunity of hearing was afforded to the assessee. If justice cannot be done on the existing record, sending the matter back may be the only tenable course.

2. Inherent powers of appellate forums

Courts have recognised that appellate authorities carry inherent powers to do complete justice, even where not expressly enumerated. The Supreme Court of India has held in several contexts that procedural provisions should not be interpreted to defeat the ends of justice. On this view, a defective original order cannot simply be annulled in a vacuum, a remand for fresh adjudication is the just outcome.

3. Section 75(2) — A Statutory Exception Worth Noting

Importantly, there is one statutory carve-out: under Section 75(2) of the CGST Act, where a notice issued under Section 74 (fraud/wilful misstatement) is found unsustainable, the proper officer must redetermine tax as if the notice were issued under the less penal Section 73. Any court, appellate authority, or tribunal can direct this redetermination, which operates as a remand in limited fraud-related proceedings. This is the only form of remand-equivalent expressly contemplated by the CGST Act at the first appellate level.

The Case Against — Now the Dominant View

1. Express statutory bar — not merely a gap

The language of Section 107(11) is unambiguous: the FAA “shall not refer the case back.” This is a mandatory prohibition, not an omission. Courts have consistently held that mandatory statutory language cannot be read down on grounds of equity or inconvenience. The very presence of the prohibition forecloses resort to inherent powers. Inherent powers exist to fill gaps, not override express bars.

2. Contrast with Section 113(3) — GSTAT’s Express Remand Power

The CGST Act, under Section 113(3), expressly confers on the GST Appellate Tribunal (GSTAT) the power to “refer the case back to the Authority that passed such decision or order.” The conferral of remand power at the Tribunal level, coupled with its express negation at the FAA level, is a powerful indicator of legislative intent. Parliament knew how to grant remand powers and simultaneously knew how to bar them. It did both.

3. Expressio unius est exclusio alterius

The principle that the expression of one thing excludes others applies with full force. By enumerating confirm, modify, and annul and then explicitly prohibiting remand, the legislature has made its intention beyond doubt. Any order that in substance redirects the adjudicating authority to re-examine facts or re-decide the matter is a remand in all but name, and equally impermissible.

4. Risk of perpetual delay and harassment

Permitting remand at the first appellate stage could enable a cycle of indefinite re-adjudication. Authorities could, under the guise of directing fresh fact-finding, perpetuate harassment of taxpayers, wholly inconsistent with GST’s stated objective of ease of doing business. As one commentator has noted, even an order that does not use the word “remand” but directs the adjudicating authority to “redetermine” or “re-examine” is effectively a remand and equally void.

Judicial Positions: A Clear Consensus Emerging

Multiple High Courts have now spoken with increasing clarity against remand powers at the FAA stage. The position is no longer genuinely contested:

The Supreme Court is yet to authoritatively settle this question in a reported judgment. However, given the consistent position of at least two High Courts — Allahabad and Madras — in multiple decisions spanning 2022 to 2026, the law at the first appellate level is now effectively settled. Practitioners may track further developments on Indian Kanoon and TaxGuru.

Practical Implications for Taxpayers and Practitioners

For practitioners and taxpayers, the settled prohibition has very real consequences. In practice, FAAs have in violation of Section 107(11) routinely been passing remand orders, particularly in cases where the adjudicating authority’s order was cursory or passed without application of mind. These orders are now vulnerable to challenge by writ under Article 226 of the Constitution.

Where an original order is defective, the appropriate strategy is to seek annulment of the order on grounds of violation of natural justice, coupled with a direction, from the High Court if necessary, for the adjudicating authority to pass a fresh, reasoned order. This achieves a functionally identical result without relying on the FAA’s non-existent remand power. The CBIC has also emphasised the importance of speaking orders from adjudicating authorities, which reduces the frequency of situations where taxpayers find themselves in this bind.

Practitioners should also note: if the FAA has already passed a remand order despite the statutory bar, the taxpayer, not just the Revenue, can challenge it by writ. A remand order passed in violation of Section 107(11) is not merely irregular; it is void for want of jurisdiction, and no limitation period runs on challenging it.

Conclusion

The question of whether the GST First Appellate Authority can remand matters back to the adjudicating authority is no longer genuinely open. Section 107(11) is explicit. The FAA “shall not refer the case back”, and the courts of the Allahabad and Madras High Courts have confirmed this in a series of decisions spanning 2022 to early 2026. Any FAA order that purports to remand, redirect, or require re-examination by the adjudicating authority is void for want of jurisdiction and is amenable to a writ.

The deeper structural lesson is salutary: the denial of remand power to the FAA places the burden squarely on adjudicating authorities to get their orders right, and on appellate authorities to decide appeals on merits rather than deflect them. In a GST regime that has long grappled with non-speaking orders and adjudications on autopilot, this judicial insistence on final appellate decision-making, however inconvenient, is a discipline worth embracing.