JANUARY 24, 2025

By K S Naveen Kumar, Advocate

A. PRELUDE: It is said that justice delayed is justice denied. In GST litigation context, Appellate Tribunal is an important forum where many disputes are expected to be resolved. Though GST was enacted with effect from 1.7.2017, the Tribunal is still not in place causing stagnation of litigation, piling up of docket load and disruption in litigation stream and has, no doubt resulted in serious prejudice to the litigants/taxpayers. This article intends to cover this aspect and more in a concise manner.

B. Tribunalisation of justice: So far in tax dispensation, a Tribunal is considered to be the final fact-finding authority and only substantial questions of law are addressed by the Courts (both High Courts and Supreme Court). In Rojer Mathew Vs South Indian Bank Ltd, - 2019-TIOL-495-SC-MISC-CB, the Apex Court held that a “Tribunal" can be understood as a body tasked with discharging quasi-judicial functions with the primary objective of providing a special forum for specific type of disputes and for faster and more efficacious adjudication of issues. The Tribunals are mutually exclusive from administrative or legislative bodies and although not strictly courts, they nevertheless perform judicial functions. With the inclusion of technical members along with judicial members in composition of tribunals, it is ensured that the adjudicatory authority is equipped with the technical knowledge required to comprehend and decide issues involving specialised subjects. Globally, the issues such as need for specialisation or pendency have resulted in a unanimous consensus for tribunalisation. Tribunals can be viewed as alternative avenues to facilitate swift dispensation of justice through less formal procedures of adjudication. An examination of existing tribunals in India and across foreign jurisdictions, show that they are best suited to deal with complex subject-matters requiring technical expertise such as service law, tax law, company law or environmental law etc.

Renowned author Sri.S.P.Sathe in his celebrated treatise on Administrative Law 1, has observed that Tribunals are generally less constrained by formal procedures which are applicable in Courts; have freedom to follow their own procedures subject to consistency with the principles of natural justice; may develop expertise in a branch of litigation and may not be subject to any appeal to a higher tribunal or court. Thus, Tribunals have grown in response to the need to provide for specialized forums of dispute settlement, which would possess some expertise and policy commitment, and be comparatively cheaper, more expeditious and free from technical procedures.

C. Dispute resolution under GST: Since GST law is still in its nascent stage, many matters may cross the Tribunal stage on substantial questions of law to be dealt with by Courts. However, the justice dispensation is not possible owing to non-constitution of the Tribunal, causing serious prejudice to the tax litigants and the law has not been able to evolve leading to uncertainty as there are many open-ended issues. Adding to the woes of the litigants, in many cases, the GST Departments (State or Centre) have pursued coercive action for recovery of tax and other demands, which has driven the parties to seek refuge by approaching writ courts. It appears that the Courts are burdened with many GST matters owing to lack of an effective alternative remedy in the form of Tribunal.

Be that as it may, GST litigation has reached a crucial stage, where many interpretational issues involving deeper examination of facts and evidence call for examination by a specialized Tribunal like GSTAT 2 and may not be gone into by the Courts, in exercise of writ jurisdiction.

D. Tentative Timelines breached:

Perhaps, GST law has the avoidable distinction of a law without the final fact-finding authority (Tribunal) for more than seven years and thus the litigants are left without an effective alternative remedy, which is unheard of in the annals of tax jurisprudence and certainly does not augur well with the nature of GST (Good and Simple Tax).

Time and again, the Government has come up with announcements about tentative dates for making the Tribunal functional, which are elusive. Sometime back it was stated that the GST Tribunal would be functional by March 2025 but as per recent reports it appears that the wait is not yet over as certain States have not been able to appoint Technical Members and there are other operational issues.

E. Mounting disputes: Even if the Tribunal is constituted and made functional after six months, the number of matters, which will go to the Tribunal in each of the State Benches and Principal Bench would be in thousands, which means that the pendency would be high from the word “go" and ultimately lead to further delay in resolution of disputes. This would prolong the prevailing uncertainty for many years and create more pressure on the system. The taxpayers would face serious difficulties if the issues are recurring in nature and in the event of the disputes going against them, they would land up with huge liabilities. Being an indirect tax, it may not be possible for them to pass on the burden of tax at a later date; not to speak of interest and other penal consequences. Even the Courts have been seeking response(s) for the delay in making the Tribunal functional.

F. Conclusion: To quote the Supreme Court 3 again, access to justice is a fundamental right. Denial of access to justice also takes place when a litigant has to spend too much money, time and effort to approach the adjudicating authority to get justice. It is high-time, the GST Council builds consensus; expedites the process and ensures that the Tribunal is put in place at the earliest. This would end many recurring disputes and bring in an environment of certainty in GST law. This would also improve our country's image as a friendly investment destination with ease of doing business and facilitate the pursuit of Viksit Bharat. The upcoming Union Budget, 2025 should provide some clarity in this regard.

[The views expressed are strictly personal.]

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1. Sixth edition - published by Butterworths

2. GST Appellate Tribunal

3. Rojer Mathew case cited in para B.