When the Department Appeals: Review Orders and APL-03

A demand dropped in adjudication, or a refund sanctioned, is not final on the day it is issued. For six months the department can still take it to the Appellate Authority, and the person who won learns of this only when a notice of hearing arrives. The person did not choose this appeal and has paid nothing to be in it. They can still end up with a confirmed demand. This guide covers how the department decides to appeal, the form it files, the time it has, the limits on which cases it takes further, and where the taxpayer stands as respondent.

The taxpayer’s own appeal is covered in Filing a First Appeal: APL-01. The law of section 107 is summarised in Appeals and Pre-Deposit.

Review: the Commissioner’s decision to appeal

The department does not appeal as an aggrieved party. Section 107(2) gives the Commissioner a supervisory power instead. He may, “on his own motion, or upon request from the Commissioner of State tax or the Commissioner of Union territory tax”, call for and examine the record of any proceedings in which an adjudicating authority has passed a decision or order:

for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the Appellate Authority within six months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order.

This is usually called review. Its output is an order of the Commissioner, often called a review order, that names the points to be decided and authorises an officer to apply. Under section 107(3), that application “shall be dealt with by the Appellate Authority as if it were an appeal”, with the authorised officer as appellant.

CBIC’s Circular No. 207/1/2024-GST, discussed below, uses the term “Reviewing Authorities” for the officers who take this decision. Where a Common Adjudicating Authority has decided a DGGI case, Circular No. 250/07/2025-GST (24 June 2025) makes the Principal Commissioner or Commissioner under whom that Additional or Joint Commissioner is posted the reviewing authority under section 107. The appeal lies to the Commissioner (Appeals) with territorial jurisdiction over that Commissionerate.

Only orders of an adjudicating authority. Section 107(2) reaches orders of “an adjudicating authority”. In M/s G.S Industries v Commissioner of Central Tax and GST, Delhi (West) (Delhi High Court, W.P.© 13149/2024, 16 December 2024), an Order-in-Appeal of 3 January 2022 had allowed the person’s refund. The department did not appeal it. The refund was sanctioned on 9 June 2023 to give effect to it. The Commissioner then reviewed the sanction order under section 107(2), and the department’s appeal against it succeeded on the ground that Annexure-B had not been filed. The Court quashed that appellate order. It held that the Commissioner, acting under section 107(2), “cannot possibly sit over and above an order passed by the appellate authority”. The power “is concerned with the examination of the record of proceedings which may have been undertaken by an adjudicating authority”.

Who hears the department’s appeal, and when

Rule 109A(2) sends the officer’s application to:

• the Commissioner (Appeals), where the order was passed by an Additional or Joint Commissioner
• an officer not below the rank of Joint Commissioner (Appeals), where it was passed by a Deputy or Assistant Commissioner or a Superintendent

Six months, and one more. The application must be made “within six months from the date of communication” of the order (section 107(2); rule 109A(2)). Section 107(4) lets the Appellate Authority allow “a further period of one month” where the appellant “was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be”. The department therefore has the same single month of grace as the taxpayer, added to a longer base period.

The form and its acknowledgement. Rule 109 requires the application in FORM GST APL-03, “along with the relevant documents, electronically”. Since Notification No. 38/2023-Central Tax, it may be filed manually only if the Commissioner has so notified, or the order is not available on the common portal. A provisional acknowledgement issues at once. A final acknowledgement with the appeal number issues in FORM GST APL-02. Where the order is not on the portal, a self-certified copy must follow within seven days, failing which the date of submitting the copy becomes the date of filing.

APL-03 asks for the officer’s name, designation and jurisdiction, the person’s GSTIN, the order and its date of communication, the issue, the period, the amount in dispute by tax, interest, penalty, fee and other charges, a statement of facts, grounds of appeal and a prayer. Unlike APL-01, it has no table for pre-deposit. The pre-deposit in section 107(6) is a condition of an appeal “under sub-section (1)”, which is the taxpayer’s appeal.

Withdrawal. Rule 109C lets the appellant withdraw an appeal filed in APL-01 or APL-03, using FORM GST APL-01/03W. After APL-02 has issued, the withdrawal needs the Appellate Authority’s approval, which is to be decided within seven days.

Monetary limits, and the cases left alone

Section 120 allows the Board, on the Council’s recommendation, to fix monetary limits “for the purposes of regulating the filing of appeal or application by the officer of the central tax”. CBIC’s Circular No. 207/1/2024-GST of 26 June 2024 is the instruction in force. It fixes the amounts below which central tax officers are not to appeal:

Forum	Monetary limit (amount involved)
Appellate Tribunal	Rs 20,00,000
High Court	Rs 1,00,00,000
Supreme Court	Rs 2,00,00,000

The circular sets no limit for an application to the Appellate Authority under section 107(2). It governs only the later stages.

How the amount is measured. Paragraph 3 of the circular provides that:

• in a tax dispute, with or without interest and penalty, only the aggregate tax in dispute (CGST, SGST or UTGST, IGST and cess) counts
• where only interest, only penalty or only late fee is in dispute, that amount counts, and where all three are in dispute without tax, their aggregate counts
• in an erroneous refund case, the refund in dispute counts
• in a composite order disposing of more than one appeal or notice, the total counts, not the amount in each

Exclusions. Under paragraph 4, the limits do not apply, and the decision is taken on merits, where:

• a provision of an Act, or a rule, notification, circular or instruction, has been held ultra vires
• the matter concerns valuation, classification, refunds, place of supply, or “any other issue, which is recurring in nature and/or involves interpretation” of the law
• strictures or costs have been imposed on the department or its officers
• the Board considers a case or class of cases must be contested

Paragraph 5 adds that “an appeal should not be filed merely because the disputed tax amount involved in a case exceeds the monetary limits”. Where an appeal is not filed only because of the limit, paragraph 6 requires the reviewing authority to record that “even though the decision is not acceptable, appeal is not being filed as the amount involved is less than the monetary limit”. Section 120(3) bars a taxpayer from arguing that the department has “acquiesced” in a decision it did not appeal for this reason.

The circular binds officers of central tax. State tax administrations act under their own State Acts.

Before the Tribunal. In Commissioner CGST & CX, Kolkata North v M/s Power Tech Global Private Limited (GSTAT, Kolkata Bench, APL/62, 74 and 75/KLK/2026, 5 August 2026), the department appealed a common order-in-appeal that had set aside a demand for Rs 74,75,604 of credit to be reversed on sales of MEIS duty credit scrips. The taxpayer argued that the appeals fell below the Rs 20 lakh limit. The Tribunal applied paragraph 3(viii): the three appeals had been decided by one composite order, so the total counted, and it exceeded the limit. It also accepted the department’s reliance on the exclusion for issues involving interpretation. It held, following its Principal Bench, that a CBIC circular “does not have a binding effect on the Tribunal”, though the department’s officers are bound by it. On the merits it held that the 2022 amendment to rule 43 was prospective. It also held that section 74 had been wrongly invoked, and sent the matter back for redetermination under section 73.

The taxpayer as respondent

The Act says less about the respondent at the first appeal than about the appellant. These provisions apply.

• Being heard. Section 107(8) requires the Appellate Authority to “give an opportunity to the appellant of being heard”. The provisos to section 107(11), which require a show cause notice before a penalty is enhanced or a new tax demand is made, are also framed around “the appellant”. The Act does not separately spell out the respondent’s hearing at the first appeal. Section 107(3) applies “the provisions of this Act relating to appeals” to the department’s application. Section 107(9) speaks of adjournments granted to “the parties or any of them”, and limits them to three for each party.
• No cross-objection at this stage. A memorandum of cross-objections exists only before the Appellate Tribunal, under section 112(5). A taxpayer who is also aggrieved by part of the same order has their own appeal under section 107(1), within three months, and with their own pre-deposit.
• The order. Under section 107(14) the order is communicated to “the appellant, respondent and to the adjudicating authority”. Rule 113(1) requires a summary in FORM GST APL-04 “clearly indicating the final amount of demand confirmed”. If the department succeeds, the APL-04 creates the demand.
• Recovery. A pending departmental appeal creates no demand. If the Appellate Authority confirms one, the taxpayer is then the person aggrieved. An appeal to the Tribunal under section 112, with the pre-deposit in section 112(8), stays recovery of the balance. This is covered in Appealing to the GST Appellate Tribunal.

Section 128A cases. CBIC’s Instruction No. 02/2025-GST (7 February 2025) dealt with department appeals against section 73 orders for 2017-18 to 2019-20 where the tax had been paid in full and only interest or penalty was in dispute. If the taxpayer otherwise met the conditions of section 128A, the proper officer “may proceed towards withdrawing such appeal”. Where the order was still at the review stage, he could accept it instead. The waiver is covered in The Section 128A Waiver, and Appeals Withdrawn Under It.

Review or revision

The same order can also be reached under section 108, by the Revisional Authority. Section 108(2)(b) bars revision while “the period specified under sub-section (2) of section 107 has not yet expired”. It also bars revision of an order that “has been subject to an appeal”. The department’s first route is review and appeal within six months. Revision begins only after that period, and only if no appeal was filed. The next guide covers it.

What to have ready

Item	Where it comes from
The order-in-original or other decision under appeal, and its date of communication	Portal, ORDERS tab; section 169 service records
The department’s APL-03, with its grounds, and the APL-02 acknowledgement	Notice from the Appellate Authority; portal
The notice, the reply, the hearing record and documents before the adjudicating authority	Portal; the person’s own file
The amounts involved by tax, interest and penalty, to check against Circular No. 207/1/2024-GST at later stages	The order
Any section 128A application and its outcome, for 2017-18 to 2019-20	Portal

Who signs

APL-03 is filed and signed by the officer authorised by the Commissioner’s order. A reply by the taxpayer to a notice in the appeal is filed on the portal by the authorised signatory, with DSC or EVC.

What can still be put right

• If the department applied after six months and one month from communication, the application is outside what section 107(4) allows the Appellate Authority to admit.
• A section 107(2) review cannot be used to reopen an order-in-appeal. That was the holding in G.S Industries.
• A demand created by an order-in-appeal in the department’s favour can be taken to the Tribunal within three months of communication.

The steps in order

1. The adjudicating authority’s order is communicated. The department’s six months under section 107(2) run from that date.
2. The Commissioner, or the reviewing authority named for the case, examines the record for legality and propriety. He decides whether to direct an appeal, applying Circular No. 207/1/2024-GST for central tax cases at the Tribunal and higher stages.
3. The authorised officer files APL-03 electronically and receives a provisional acknowledgement, then APL-02.
4. The taxpayer receives notice from the Appellate Authority, and may reply and be heard. A new tax demand requires a show cause notice within the section 73, 74 or 74A time limits.
5. The Appellate Authority passes its order with an APL-04 summary, communicated to both sides.
6. A taxpayer aggrieved by that order may appeal to the Tribunal under section 112. A department aggrieved may apply under section 112(3), subject to the monetary limits.

The next guide covers revision by the Revisional Authority under section 108.