DECEMBER 14, 2022

By Vijay Kumar

HOT News in some social, digital, print, sensational media last week suggested that the GST Appellate Tribunal will be set up in about three months. The agonising wait is over and all our litigation issues will be taken up by the new Tribunal and we can all live happily ever after.

The congenital pessimist that I am, I hope no such thing happens; I know no such thing will happen. But then, back in 2017, I hoped that GST will not befall on this unsuspecting nation, but I was proved wrong and almost lost a livelihood. What they call legacy litigation of excise, customs, service tax cases in the CESTAT and High Courts kept my black coat and gown making respectably frequent trips to the dry cleaners.

But suddenly everybody lost interest in the CESTAT and like eager aspirants we all wait for the GST Tribunal.

The difference between the optimist and the pessimist is that the pessimist just has more data.

In December 2021, the government announced that the CESTAT had some 19 vacancies, 12 of Technical Members and 7 of Judicial Members, and initiated the process of selecting members. On 15th September 2022, the Department of Personnel and Training informed the Revenue Secretary that

the Appointments Committee of the Cabinet has approved the proposal of the Department of Revenue for appointment of following candidates, against 07 posts of Judicial Member and 12 posts of Technical Member in the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), in the salary of Rs. 2,25,000/-p m., for a period of 04 years, or till attaining the age of 67 years, whichever is earlier.

So, 19 eminent jurists have been selected and approved for appointment, but they are still waiting for that elusive appointment orders. It is more than a year since the selection process started, but the benches are still empty - just like that pessimistic glass of water being half empty. The sanctioned strength of the CESTAT is 33 Members and there are 19 vacancies, which means the tribunal is functioning with 14 members, less than half the required strength. The Court is half empty - you can also call it as half full, depending on whether you are a pessimist or an optimist, but the fact remains that we do not have enough judges in the CESTAT. And it is not as if we do not have qualified people to fill those vacancies; we have them, selected and approved, but yet to be given appointment orders. For the selected members, it is an embarrassing situation - they and all around them know that they are selected to occupy the exalted position in the bench; now it will be too embarrassing for them to practice in the CESTAT (or even High Courts) as they are already selected as Members of the Tribunal and will be addressed as 'my lords', but they do not know when the day will come for them to cross the bar to be in the elevated bench. Recently in a social gathering of CESTAT lawyers, I overheard somebody suggesting that we have to file a PIL in the Supreme Court to make the government give posting orders to these selected and approved waiting members of the Tribunal. And the CESTSAT has over 75000 pending cases.

This is the position of the CESTAT, which recently celebrated its 40th anniversary and we are optimistic that the mystical GST Appellate Tribunal will start functioning in three months. This is the height of hope and I remain a congenital pessimist.

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.

That was in July 2018!

On 13th March, 2019, the government issued a notification:

In exercise of the powers conferred by the section 109 of the Central Goods and Services Tax Act, 2017, the Central Government, on the recommendation of the Council, hereby notifies the creation of the National Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) at New Delhi, with effect from the date of publication of this notification in the Gazette of India (Extraordinary).

So, the National Bench was created, but it remained a notional bench; no members were appointed and nobody knows where the bench is situated and where the bar is. That was more than three years ago. The Government even told the Parliament - a notification to constitute the National Bench of GSTAT at New Delhi has been issued in this regard. True, but notifications do not make a tribunal.

On 20th September 2019, the Madras High Court struck down Section 109(3) and 109(9) of the CGST Act, 2017, which prescribes that the tribunal shall consists of one Judicial Member, one Technical Member (Centre) and one Technical Member (State).

When can the GSTAT be launched?

The following steps are required:

1. The laws (Central and States) have to be amended. That is not an easy process. Some Under-secretary in the Board should draft an amendment and it has to go through various levels till the FM. Almost the same process has to be repeated in the Law Ministry and then GST Council. Then the law has to be passed in both houses of Parliament, signed by the President, and then notified. The States will have to repeat the process.

2. Government has to notify the Tribunal.

3. Process has to be initiated to select Members of the Tribunal

4. Infrastructure - buildings, computers, staff, finance etc., have to be arranged.

This will take at least two years, if the government shows some respect to the Courts.

Until then, tribunalised justice in GST will have to wait.

Until Next week