Indirect Tax Laws · Miscellaneous Provisions (GST)

Assessment, Appeal and Revision of Pre-GST Matters (Section 142 CGST)

Updated 5 October 2026

Section 142 of the CGST Act keeps pending pre-GST appeals, reviews and references on CENVAT credit (s.142(6)) or output tax (s.142(7)) under the existing law. Under s.142(8)(a), amounts payable on later assessments for pre-GST supplies are recovered as arrears with no ITC. Refunds in these proceedings are paid in cash, not credited to the ledger; s.140 carry-forward is separate.

Understand Assessment, Appeal and Revision of Pre-GST Matters

GST started on 1 July 2017 (the appointed day). Before that, tax was levied under the existing law: Central Excise, service tax, VAT and similar laws. Those laws did not vanish. Departments could still assess, issue notices and decide appeals for the old periods. Section 142 tells you which law governs these old matters.

Do not learn one blanket rule. Tie each situation to its sub-section:

Appeal, review or reference relating to a claim for CENVAT credit: s.142(6)(a). It is disposed of under the existing law. Credit found admissible is refunded in cash. The rejected part is not admissible as ITC under the CGST Act.
Appeal, review or reference relating to recovery of CENVAT credit: s.142(6)(b). It is disposed of under the existing law. Any amount found recoverable is recovered as an arrear of tax under the CGST Act, and it is not admissible as ITC.
Appeal, review or reference relating to output tax liability: s.142(7)(a). It is disposed of under the existing law. Any amount found recoverable is recovered as an arrear of tax under the CGST Act, and it is not admissible as ITC.
Amount of tax, interest, fine or penalty that becomes refundable in such an output tax proceeding: s.142(7)(b). It is refunded in cash under the existing law. It is not credited to the electronic credit ledger.
Assessment or adjudication instituted on or after the appointed day for pre-GST supplies: s.142(8)(a). Any amount that becomes recoverable and is not recovered under the existing law is recovered as an arrear of tax under the CGST Act. It is not admissible as ITC.
Claims for refund: s.142(1) and s.142(3). They are dealt with under the existing law.

For appeals, reviews and references, the test is the period and the contravention. For s.142(8)(a), the test is that the supplies are pre-GST and the proceeding is instituted on or after the appointed day.

Next, what happens to the result. If the old-law proceeding ends with tax, interest, fine or penalty payable, it is recovered as an arrear of tax under the CGST Act (s.142(6)(b), s.142(7)(a) or s.142(8)(a), according to the proceeding). The amount recovered this way is not admissible as input tax credit. It is a historic cost, not a GST payment on a current supply.

The result may favour the taxpayer. Keep the routes apart:

Under s.142(6)(a), CENVAT credit found admissible is refunded in cash under the existing law. It is not credited to the electronic credit ledger. The rejected part is not admissible as ITC under the CGST Act.
Under s.142(7)(b), tax, interest, fine or penalty that becomes refundable is refunded in cash under the existing law. It is not credited to the electronic credit ledger.

So refunds arising in pending old-law proceedings are paid in cash. They do not go to the electronic credit ledger.

Carry-forward of closing credit through TRAN-1 is a different route, under s.140. Do not mix it up with credit that was in dispute and found admissible in these proceedings.

So your answer usually has three parts: which law decides the proceeding (with the sub-section), how a demand is recovered, and how a favourable outcome is paid out. This section is a continuity rule. It does not re-open the old law for new supplies after 1 July 2017.

Key rules to remember

Governing law: Pre-GST matter → disposed of under the existing law: appeal, review, reference on CENVAT credit claim (s.142(6)(a)) or recovery of CENVAT credit (s.142(6)(b)); appeal, review, reference on output tax liability (s.142(7)(a)); refund claims (s.142(1), s.142(3)). Assessment or adjudication instituted on or after the appointed day for pre-GST supplies (s.142(8)(a)) → amount payable, if not recovered under the existing law, is recovered as an arrear under the CGST Act; Match the proceeding to its sub-section. The appointed day is 1 July 2017.
Amount found payable: Tax, interest, fine, penalty or CENVAT credit found recoverable → recovered as arrear of tax under CGST Act; no ITC on the amount (s.142(6)(b), s.142(7)(a); s.142(8)(a) where not recovered under the existing law); Recovery machinery is GST. The liability itself is decided under the old law.
Credit found admissible: s.142(6)(a): CENVAT credit found admissible → refunded in cash under existing law, not credited to the electronic credit ledger; rejected amount → not ITC under GST; This applies to an appeal, review or reference on a claim for CENVAT credit.
Refund in an output tax proceeding: s.142(7)(b): tax, interest, fine or penalty found refundable → refunded in cash under existing law; not credited to the electronic credit ledger; There is no ledger route for refunds in these proceedings. The TRAN-1 carry-forward under s.140 is a separate matter.
Three-part answer: Governing law with sub-section + recovery route + refund route; Use this as the skeleton for any question on this topic.

How to solve Assessment, Appeal and Revision of Pre-GST Matters questions

Use this method for any case on pending or reopened pre-GST proceedings. Keep the answer in provision, facts, conclusion form.

1Identify the nature of the proceeding: assessment, adjudication, appeal, review, reference or revision. Note whether it concerns output tax liability, a CENVAT credit claim or recovery of CENVAT credit.
2Fix the period. Check that the liability or contravention belongs to the time before 1 July 2017 under the existing law (excise, service tax, VAT).
3Note the type of proceeding and pick the sub-section: s.142(6)(a) for appeal, review or reference on a CENVAT credit claim; s.142(6)(b) for one on recovery of CENVAT credit; s.142(7)(a) for one on output tax liability; s.142(8)(a) for assessment or adjudication instituted on or after the appointed day for pre-GST supplies. Use s.142(1) and s.142(3) for refund claims.
4State the rule in plain words: such a proceeding is disposed of under the existing law.
5Work out the outcome from the facts. Is any amount payable by the taxpayer, any CENVAT credit admissible, or any amount refundable?
6Apply the matching route. Payable: recover as an arrear of tax under the CGST Act (s.142(6)(b), s.142(7)(a), s.142(8)(a)). Admissible CENVAT credit: cash refund under the existing law (s.142(6)(a)). Tax, interest, fine or penalty refundable in an output tax proceeding: cash refund under the existing law (s.142(7)(b)).
7Add the ITC point. The amount recovered as an arrear is not ITC. Rejected credit is not ITC. Refunds are paid in cash and are not credited to the electronic credit ledger.
8Write the conclusion with figures, split by component such as tax, interest, penalty and credit.

Quickest way: Old law decides, GST only collects, refunds are in cash

When to use it: Use it for short MCQs and for 4 to 5 mark written questions where the facts are brief and the dates are clear.

Ask: does the matter relate to a period or contravention before 1 July 2017? If yes, the existing law decides it.
Ask: who is paying whom? Taxpayer owes: recover as an arrear under CGST, no ITC.
Taxpayer is owed admissible credit or a refund: pay it in cash under the existing law (s.142(6)(a) for CENVAT credit, s.142(7)(b) for tax, interest, fine or penalty). It is not credited to the electronic credit ledger.
Write one line per component, name the sub-section, and close with the amount.

Common mistakes in Assessment, Appeal and Revision of Pre-GST Matters

Applying the CGST Act's demand provisions to an old excise or service tax matter because the notice was issued after 1 July 2017.
Students look at the date of the notice instead of the period the matter relates to.
Fix: Look at the period and the type of proceeding. Where an assessment or adjudication is instituted on or after the appointed day for pre-GST supplies, s.142(8)(a) applies: the amount payable, if not recovered under the existing law, is recovered as an arrear under the CGST Act, with no ITC.
Stating one blanket rule that every pre-GST proceeding, whenever it began, is decided under the existing law under a single provision.
Students memorise the headline and skip the sub-section structure.
Fix: Map the provisions: s.142(6) covers CENVAT credit proceedings (s.142(6)(a) claims, s.142(6)(b) recovery), s.142(7) covers appeals, reviews or references on output tax liability, s.142(8) covers assessment or adjudication instituted after the appointed day for earlier supplies, and s.142(1) and s.142(3) cover refund claims.
Allowing ITC on tax, interest or penalty recovered as an arrear under the old law.
Students assume any tax collected under the CGST machinery creates credit.
Fix: State clearly that the amount recovered as an arrear is not admissible as input tax credit.
Crediting an amount found admissible or refundable in a pending old-law proceeding to the electronic credit ledger.
Students confuse this with the TRAN-1 carry-forward of closing credit under s.140, or assume any favourable credit goes to the ledger.
Fix: Admissible CENVAT credit under s.142(6)(a), and tax, interest, fine or penalty refundable under s.142(7)(b), are refunded in cash under the existing law. They are not credited to the electronic credit ledger. The rejected part is not ITC.
Saying that a refund under a pending old-law proceeding is governed by section 54 of the CGST Act.
Students link all GST refunds to section 54.
Fix: Amounts found refundable in these proceedings are refunded in cash under the existing law, not through a fresh section 54 claim.
Dropping the clause 'unless recovered under the existing law' in an assessment or adjudication case.
Students memorise only the GST recovery route.
Fix: Say that the arrear route applies to the amount not already recovered under the old law. Otherwise the same amount is recovered twice.
Treating the rule as covering new supplies made after the appointed day.
The phrase 'on or after the appointed day' is read as the date of the supply.
Fix: That phrase describes when the proceeding is instituted. The subject matter must still be a pre-GST supply, liability or credit claim.

Worked examples

Example 1

Case: Zenith Castings Ltd received an excise order in 2016 demanding duty of ₹8,00,000 and a penalty of ₹2,00,000 for a period before GST. Its appeal to the appellate authority was pending on 1 July 2017. In 2019 the appeal was dismissed and nothing has been paid. How is the demand treated, and can Zenith claim ITC when it pays?

Show the solution

Provision: an appeal relating to output tax liability for a pre-GST period is disposed of under the existing law (s.142(7)(a)).
Facts: the duty and penalty relate to a period before 1 July 2017, and the appeal was pending on the appointed day. It is decided under the Central Excise law.
Outcome: the appeal is dismissed, so ₹8,00,000 duty and ₹2,00,000 penalty, plus any interest due under the existing law, are payable.
Recovery: the amount found payable is recovered as an arrear of tax under the CGST Act (s.142(7)(a)).
ITC: the amount so recovered is not admissible as input tax credit under the CGST Act.

Answer: The appeal is decided under the existing law (s.142(7)(a)). The unpaid ₹10,00,000 (₹8,00,000 duty plus ₹2,00,000 penalty), along with interest under the old law, is recovered as an arrear of tax under the CGST Act. Zenith cannot claim ITC on it.

Example 2

Case: Orbit Pumps Ltd was denied CENVAT credit of ₹3,00,000 for a pre-GST period by an adjudicating officer. Orbit appealed, and the appeal was pending on 1 July 2017. In 2018 the appeal was allowed for ₹2,00,000 of credit and rejected for ₹1,00,000. Orbit asks whether it can add ₹2,00,000 to its GST electronic credit ledger. How is the outcome treated?

Show the solution

Provision: an appeal relating to a claim for CENVAT credit for the pre-GST period is disposed of under the existing law (s.142(6)(a)).
Facts: the credit relates to a pre-GST period and the appeal was pending on the appointed day, so it is decided under the existing law.
Outcome: ₹2,00,000 is held admissible as CENVAT credit and ₹1,00,000 is rejected.
Admissible part: the ₹2,00,000 is refunded in cash under the existing law (s.142(6)(a)). Nothing is added to the electronic credit ledger.
Rejected part: the ₹1,00,000 is not admissible as ITC under the CGST Act.

Answer: Orbit gets a cash refund of ₹2,00,000 under the existing law (s.142(6)(a)). It cannot add that amount to the electronic credit ledger. The rejected ₹1,00,000 is not available as ITC under GST.

Exam tips

Begin every answer with the governing-law line and name the sub-section. State that the existing law decides the matter.
Split the facts into components such as duty, interest, penalty and credit, and give each its own treatment.
In MCQs, 'ITC on the arrear' and 'credit to the electronic credit ledger' are the usual wrong options. Refunds in these proceedings are paid in cash under the existing law.
Learn and cite the relevant sub-sections of s.142, for example s.142(1), (3), (6), (7) and (8), and also state the rule in plain words. The citation earns marks along with the explanation.
Write the answer as provision, facts, conclusion, and keep numbers consistent between steps and the final line.

Practice questions from Miscellaneous Provisions (GST)

Assessment, Appeal and Revision of Pre-GST Matters: frequently asked questions

Which law applies to a pre-GST assessment or appeal that is still pending?

The existing law applies, such as Central Excise, service tax or VAT. Appeals, reviews and references on CENVAT credit (s.142(6)) or on output tax liability (s.142(7)(a)) are disposed of under it. For assessments or adjudications instituted after the appointed day for pre-GST supplies, s.142(8)(a) provides that amounts payable and not recovered under the existing law are recovered as arrears under the CGST Act. Section 142 of the CGST Act is the bridge that keeps these matters alive.

How is a demand from an old-law proceeding recovered after GST?

The amount found payable is recovered as an arrear of tax under the CGST Act (s.142(7)(a) for output tax appeals, s.142(6)(b) for recovery of CENVAT credit, s.142(8)(a) for later assessments or adjudications, where not recovered under the existing law). The person cannot take ITC on the amount so recovered.

If I win a CENVAT credit appeal, do I get ITC under GST?

No. Under s.142(6)(a), credit found admissible is refunded in cash under the existing law and is not credited to the electronic credit ledger. Any amount rejected is not available as ITC under the CGST Act. For output tax proceedings, the same cash-refund rule for tax, interest, fine or penalty is in s.142(7)(b).

Is a proceeding started after 1 July 2017 on a pre-GST period decided under GST law?

Where it is an assessment or adjudication instituted on or after the appointed day for pre-GST supplies, s.142(8)(a) applies. Any amount that becomes recoverable and is not recovered under the existing law is recovered as an arrear under the CGST Act, with no ITC. The date the proceeding began does not by itself make the supply a GST-period one.