Department Ordered to Pay ₹25,000 Costs for Appeal Below ₹20 Lakh Limit: GSTAT Bhopal

The Bhopal Bench of the GST Appellate Tribunal allowed the Revenue to withdraw a ₹2,44,144 appeal filed in breach of the CBIC litigation limit, but made it compensate the taxpayer.

GSTAT Bhopal has imposed costs of ₹25,000 on the Department for filing an appeal under Section 112(3) of the CGST Act involving ₹2,44,144, below the ₹20,00,000 limit fixed for departmental appeals before the Tribunal by Circular No. 207/1/2024-GST dated 26 Jun 2024, issued under Section 120. The appeal was dismissed as withdrawn. [Butulu Majhi v. Pradhan Traders, 2026-juristway.com-3293-GSTAT(Bhopal)-GST]

Upendra Kumar Singh, Member (Judicial), passed the final order. The Department filed the appeal on 26 Mar 2026 against an order-in-appeal of the Joint Commissioner (Appeal), CGST & CX, Bhopal dated 27 Dec 2024. After the appeal was admitted for final hearing, the respondent engaged an advocate and filed written submissions, a reply and a rejoinder, and the appeal was listed for final hearing more than once.

At the final hearing stage, on 2 Nov 2026, the Department applied to withdraw the appeal because the amount involved was below the monetary limit. The Tribunal noted that the circular, which bars Central Tax officers from filing appeals before the GSTAT below that limit, was in force when the appeal was filed, and that no valid explanation had been given for breaching the threshold.

The Department’s Authorised Representative could not show any sufficient reason or exceptional circumstance that compelled the filing. The Tribunal held that the Department had failed to follow the mandatory directions in the circular, and that indiscriminate litigation runs directly counter to the objectives of the National Litigation Policy. By filing the appeal, it observed, the Department had wasted the Tribunal’s valuable time, and the respondent had been made to incur litigation expenses that were in no way justified.

The withdrawal application was allowed subject to costs of ₹25,000, payable by the Department to the respondent as litigation expenses within one month of the order, and the appeal was dismissed as withdrawn.

2026-juristway.com-3293-GSTAT(Bhopal)-GST