Supreme Court Rules ₹2 Crore GST Threshold Applies to Pending Appeals, Upholds CBIC Circular

The Supreme Court has held that the ₹2 crore threshold for GST appeals applies to pending cases, not only to new filings. It dismissed Revenue appeals in Commissioner of Commercial Tax & Ors. v. Vikram Cement after finding the disputed tax below the limit.

The tax effect was ₹25,47,448. The appeals did not proceed.

The ruling interprets the government’s litigation policy as covering appeals already before the Court. It also addresses the Revenue’s position that an appeal filed before the policy took effect should remain unaffected.

The Court rejected that reading. Its decision rests on the language used in the 2024 circular and the policy’s direction about appeals that should not be pursued.

“expressly covers not only filing but also pursuing appeals”

The Court relied on CBIC Circular No. 207/1/2024-GST, dated 26 June 2024. The wording encompasses both the act of filing an appeal and the later decision to continue one already filed.

That interpretation applies the policy to disputes already moving through the court system. The Revenue had argued the circular should not reach previously filed cases; the Court did not accept that limitation.

The tax-only calculation determines whether the appeal crosses the cap

For Supreme Court appeals, the monetary limit is ₹2,00,00,000. The circular specifies which part of a demand counts when assessing whether a case falls within that ceiling.

“(i) Where the disputes pertains to demand of tax (with or without penalty and/or interest), the aggregate of the amount of tax in dispute (including CGST, SGST/UTGST, IGST and Compensation cess) only shall be considered while applying the monetary limit for filing appeal.”

The clause directs the calculation to the tax in dispute. Penalty or interest may accompany a tax demand, but the quoted condition says the tax amount alone is counted for the monetary limit.

In the appeals before the Court, that figure was ₹25,47,448, well below the ₹2,00,00,000 cap. The Court dismissed them under the circular’s monetary bar rather than allowing Revenue to continue pursuing them.

The same approach covers tax disputes involving CGST, SGST/UTGST, IGST and Compensation Cess. The categories are expressly named in the circular’s calculation rule.

The litigation policy sets separate limits at three levels

The government’s GST anti-litigation policy uses different ceilings depending on the forum. The amounts rise at each level.

The Supreme Court’s ruling concerns the top tier. It did not treat the limit as a rule confined to appeals filed after the circular; it applied the stated policy to matters still pending.

The order framed the rule across the GST categories named in the circular, rather than limiting its reading to one tax type. Its reasoning links the tax calculation and the instruction against pursuing appeals below the relevant monetary limit.

“A plain reading of the above condition of the circular would make it explicitly clear that even in respect of pending appeals relating to CGST, SGST/UTGST, IGST and Compensation Cess, the monetary limit fixed would be applicable.”

The Court then dismissed the cases under that restriction, stating that “the present appeals have to be dismissed on the ground of bar contained thereunder.” The order applies that reading to pending appeals across the named GST regimes.