Section 107(2): The Departmental Appeal and the Review Order

Section 107 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

An order goes in the taxpayer's favour. That is not the end of it, and the window in which it can be reopened is twice as long as the taxpayer's own.

Section 107(2): the Commissioner may, on his own motion or upon request from the Commissioner of State tax or 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 it, 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 decision or order, for the determination of such points arising out of it as may be specified by the Commissioner in his order. 107(3): such an application shall be dealt with as if it were an appeal, and the authorised officer as if he were an appellant.

The asymmetry

Six months, no pre-deposit — so a favourable order is not settled for at least six months, and up to seven with the s.107(4) extension.

What the review order must contain

The power in s.107(2) is exercised by order, and that order does three things:

It records the Commissioner's satisfaction on the legality or propriety of the decision or order. Not merely a disagreement with the outcome — the standard named in the section.

It directs a subordinate officer to apply to the Appellate Authority.

It specifies the points arising out of the decision or order for determination.

That third element is the important one for the taxpayer. Section 107(3) makes the application an appeal, and the points specified by the Commissioner define the scope of that appeal.

So on receiving notice of a departmental appeal, the first documents to obtain are:

• the review order under s.107(2), with its date;
• the points specified in it;
• the application filed by the authorised officer.

An appeal that argues beyond the specified points, or an application filed without a review order identifying them, is open to objection.

The taxpayer as respondent

Section 107(3) makes the provisions relating to appeals apply to the application. So:

You are heard. Section 107(8) gives the appellant an opportunity of being heard, and the appeal machinery contemplates the respondent being heard too — s.107(14) requires the order to be communicated to the appellant, respondent and the adjudicating authority.

The provisos to s.107(11) protect you. An order enhancing a fee, penalty or fine, or reducing a refund or credit, requires a reasonable opportunity of showing cause. And a fresh tax demand requires a notice and must be within the s.73 / 74 / 74A limitation — which, six months after the original order, is often already gone. Section 107(11) →

No pre-deposit applies to you. The pre-deposit in s.107(6) is a condition on filing an appeal under s.107(1), not on defending one.

What to do:

1. Obtain the review order and the application at once.
2. Check the six months from communication of the original order.
3. Confine the appeal to the specified points, and object to anything beyond them.
4. File a reply meeting each specified point, with the record from the adjudication.
5. Support the order below on every ground it decided in your favour, and on grounds the adjudicating authority did not need to decide — a respondent may support the order on any ground available on the record.
6. Take the s.107(11) second proviso where the department seeks a fresh tax demand out of time.

Section 120: monetary limits, and what they do not mean

Section 120(1): the Board may, on the Council's recommendations, issue orders, instructions or directions fixing monetary limits for regulating the filing of appeals or applications by officers of central tax.

Section 120(2): where an officer has not filed an appeal in pursuance of those limits, that shall not preclude him from filing an appeal in any other case involving the same or similar issues or questions of law.

Section 120(3): no person shall contend that the officer has acquiesced in the decision by not filing an appeal.

Section 120(4): the Appellate Tribunal or court hearing such an appeal shall have regard to the circumstances under which the appeal was not filed.

The practical effect: a departmental decision not to appeal a small matter creates no precedent and no estoppel. A taxpayer who wins an order below the monetary limit has won that case, and nothing more — the same issue may be litigated in a larger case, and the earlier non-appeal cannot be pleaded as acceptance.

The converse is worth noting too: s.120(4) requires the forum to have regard to why the appeal was not filed, so the circumstances are relevant even though acquiescence cannot be contended.

Key takeaways

• Section 107(2) gives the Commissioner six months from communication to direct an appeal, with no pre-deposit.
• The review is on the legality or propriety of the order, exercised by order specifying the points for determination.
• Section 107(3) treats the application as an appeal, with the authorised officer as appellant.
• The appeal is confined to the specified points — obtain the review order and check them.
• As respondent, the s.107(11) provisos protect against enhancement without notice and against out-of-time fresh demands.
• Section 120 means a non-appeal on monetary limits creates no precedent and no acquiescence.

Read next

• Section 107: The First Appeal and the Pre-Deposit
• Section 107(11): No Remand, and the Two Provisos
• Section 108: The Revisional Authority and Its Four Bars
• Section 120 of CGST Act 2017 — Appeal Not to Be Filed in Certain Cases

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act as amended to 31 March 2026 (ICAI Bare Law, 12th edition).