MARCH 06, 2019

By Vijay Kumar

WHERE is the Appellate Tribunal: Section 109(1) of the CGST Act stipulates, "The Government shall, on the recommendations of the Council, by notification, constitute with effect from such date as may be specified therein, an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority."

But where is the Tribunal? Appellate Authorities have been passing orders and the assessees do not know where to go in appeal against the orders of the mighty appellate authorities. One such assessee approached the Allahabad High Court. On 17.4.2018, the High Court issued notice to the Government. Recently, on 13.02.2019, the High Court observed,

In this matter learned counsel for the G.S.T. Council is unable to tell as to whether the Tribunal is constituted or not. Learned standing counsel appearing for the State is also unable to tell as to whether the State has moved in the matter or not. List this matter on 28th February, 2019. On that date in addition to standing counsel, some responsible officers of the State from Lucknow as well as G.S.T. Council will appear in this matter. - 2019-TIOL-449-HC-ALL-GST.

In response to the above order dated 13.02.2019, two affidavits have been filed, one by the G.S.T. Council and the other by the State.

On a perusal of the two affidavits, the High Court in its order on 28.02.2019 noted that:

it is apparent that promises are being made only in the air. There seems to be no concrete proposal to set up the appellate Tribunal. On the other hand in the affidavit filed by the State it appears that a recommendation has been made by the State to set up a Bench of the Tribunal at Lucknow, which is also not in accordance with the order passed by Hon'ble Supreme Court in the case of Madras Bar Association vs. Union of India which provides that the Tribunal will be set up at the place where the Principal Bench of the High Court is situate. In the present case the principal Bench of the High Court is in Allahabad. This seems to be another dilatory tactics.

The High Court further noted,

On the one hand the right of appeal is not being given to the petitioner, on the other hand the State and the Centre are both very quick to make recoveries from persons, who have orders against them. A litigant cannot be left without a remedy for reasons that the Government is unable to provide forums. In the present case there is not even an assurance that within next six months, one year or two years it may come up.

The High Court directed both the Centre and the State Governments to file better affidavits giving a cut-off date by which they propose to set up the Tribunal. Please see - 2019-TIOL-521-HC-ALL-GST.

The matter is listed on 15th March and we can only hope that the better affidavits are filed by then. Elections are likely to be announced any time now and most probably, nobody in the Government would have the time to think of Tribunals, when more interesting activities like elections are round the corner.

GST is almost two years old and we are yet to create that all important Tribunal. It is not as if nothing has been done.

In the 28th GST Council Meeting held on 21 July, 2018, the Joint Secretary, Department of Revenue informed the Council that the draft rules of Goods and Service Tax Appellate Tribunal (Appointment and Conditions of Service of President and Members) Rules, 2018 was approved by the GST Implementation Committee (GIC).He further stated that it was proposed to constitute a GST Appellate Tribunal (GSTAT) National Bench at New Delhi and three Regional Benches at Mumbai, Chennai and Kolkata and after seeking the recommendations and approval of the GST Council, approval would be taken for creation of necessary posts of Chairman and Members.

The Council approved the:

i) Constitution of Goods and Services Tax Appellate Tribunal;

ii) Creation of National Bench of GST Appellate Tribunal at New Delhi and three Regional Benches at Mumbai, Chennai and Kolkata.

That was in July 2018. Not much happened after that.

On 23 rd January 2019, the PIB issued a Press Release:

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the creation of National Bench of the Goods and Services Tax Appellate Tribunal (GSTAT).

The National Bench of the Appellate Tribunal shall be situated at New Delhi. GSTAT shall be presided over by its President and shall consist of one Technical Member (Centre) and one Technical Member (State).

The creation of the National Bench of the GSTAT would amount to one time expenditure of Rs.92.50 lakh while the recurring expenditure would be Rs.6.86 crore per annum.

The first direction from the Allahabad High Court was on 17.04.2018 and even on 28.02.2019, the Government is not sure about the Tribunal.

Readers who are familiar with my earlier column DDT, would perhaps remember that the persistence of the Allahabad High Court was to a large part responsible for setting up the CESTAT Bench at Allahabad. Please see Elusive CESTAT Bench at Allahabad -Persistent HC in DDT 2659 - 10 08 2015. Maybe the Allahabad High Court will make the Government establish these GST Tribunal benches.

IS THE GST APPELLATE TRIBUNAL LEGAL? The very validity of the Tribunal has been questioned in several High Courts. Please see Tribunalisation of GSTICE? in these columns.

Some of the grounds taken in challenge are:

i) Sections 109(3), (4) and (9) are unconstitutional to the extent they overload the Tribunal Benches with Technical Members and reduce the Judicial Members to a minority.

ii) A Technical Member who is not legally qualified and who does not have long standing appellate experience cannot be appointed to the Tribunal.

iii) Section 110(2) is ultra vires the Constitution since it allows even a Technical Member to act as President in case of vacancy in the office of President or President being unable to discharge his duties

Before the Tribunal Benches are established, the High Courts will be flooded with avoidable litigation.

Until next week