As part of a phased rollout, the faceless adjudication system is being initially implemented in the districts of Pathanamthitta and Idukki.
In a landmark move towards enhancing transparency, efficiency, and ease of doing business, the Government of Kerala has officially launched the first phase of its “Faceless Adjudication” mechanism under the State Goods and Services Tax (SGST) Department. This initiative marks a significant shift in the adjudication process for tax-related show cause notices (SCNs) under Sections 73, 74, and 74A of the Kerala SGST Act, 2017.
The decision, first announced in the Kerala Budget 2025, aims to provide taxpayers with a fair, unbiased, and technology-driven adjudication process that eliminates physical interface between taxpayers and tax officials.
Pilot Phase Begins in Pathanamthitta and Idukki
As part of a phased rollout, the faceless adjudication system is being initially implemented in the districts of Pathanamthitta and Idukki. All SCNs issued by the Audit vertical in these districts, effective from August 1, 2025, will now be adjudicated digitally by proper officers in the Taxpayer Services vertical — irrespective of their original territorial jurisdiction.
The move is supported by amendments to Notification 1/2023 (State Tax), which extends the jurisdiction of adjudicating authorities across the entire state of Kerala.
Faceless Architecture: Roles and Workflow
The new system introduces a structured three-tier framework to manage and monitor faceless adjudication efficiently:
1. Notice Issuing Authority (NIA):
- Responsible for issuing SCNs under the relevant sections of the Act.
- Must route SCNs to designated Faceless Routing Officers (FROs) based on pre-defined pecuniary limits.
- Prohibited from mentioning any adjudicating authority’s name in the SCN to preserve impartiality.
- Required to maintain a formal register and communicate case allocations to the Nodal Supervisory Officer (NSO).
2. Faceless Routing Officers (FROs):
- Serve as intermediaries between NIAs and adjudicating authorities.
- Receive and allocate SCNs strictly as per monetary limits and digital roles (L3 – Circle Level, L1 – State Level).
- Four designated categories of FROs include:
- JC (Joint Commissioner)
- DC (Deputy Commissioner)
- AC/STO (Assistant Commissioner/State Tax Officer)
- DSTO/ASTO (Deputy STO/Assistant STO)
- FROs are responsible for transferring cases through the Back Office Portal (GSTN) and must adhere to instructions from the NSO.
3. Faceless Adjudicating Authorities (FAAs):
- Assigned ‘State Role (L1)’ for conducting faceless adjudications.
- Operate independently of their jurisdictional roles (L3/L2) for this purpose.
- Must ensure statutory timelines are observed and offer personal hearings exclusively via online platforms.
- Cannot summon NIAs for additional documents but may allow physical verification of documents (RUDs) at the issuing office if requested by the taxpayer.
- Retain post-adjudication responsibilities such as processing rectification under Section 161 and ensuring final orders are shared with all stakeholders, including the jurisdictional Circle Office for litigation follow-up.
Key Safeguards & Compliance Instructions
- All adjudication must be in compliance with Circular No. 06/2023 (dated 08.01.2023) and Circular No. 07/2025 (dated 14.03.2025).
- A strict prohibition is placed on physical hearings; only virtual hearings are allowed in line with the principles of natural justice.
- FAA is also instructed to wait until the expiry of the statutory 30/60-day response period before proceeding with further action.
Nodal Supervision and Digital Infrastructure
To monitor the new system’s integrity and timeliness, a Nodal Supervisory Officer (NSO) — the Deputy Commissioner, Economic Intelligence Division — has been designated. The NSO will oversee performance metrics, routing accuracy, and case reassignment protocols.
A dedicated Register Maintenance and Status Tracking Protocol is also being developed by the Economic Intelligence Division to ensure accountability and data integrity across all adjudication levels.
Next Steps and Future Expansion
While the pilot phase is limited to Pathanamthitta and Idukki districts, the Kerala State GST Department plans to expand the faceless adjudication mechanism across the entire state in due course. The move is part of a broader restructuring initiative that separates administrative functions into Audit, Intelligence & Enforcement, and Taxpayer Services — aiming to improve efficiency and reduce the scope for discretionary decision-making.
The introduction of faceless adjudication is widely expected to:
- Improve consistency in tax decisions
- Eliminate personal bias and reduce corruption
- Encourage voluntary compliance among businesses
- Strengthen the perception of a taxpayer-friendly administration
