GST Appellate Tribunals: A Rear View Mirror Peek at High Court Decisions on Non-Constitution of GSTATs

Goods and Services Tax Appellate Tribunal (GSTAT) is the forum of second appeal in Goods and Services Tax laws and the first common forum of dispute resolution between Centre and States. The appeals against the orders in first appeals issued by the Appellate Authorities under the Central and State GST Acts lie before the GST Appellate Tribunal, which is common under the Central as well as State GST Acts. Being a common forum, GST Appellate Tribunal will ensure that there is uniformity in redressal of disputes arising under GST, and therefore, in implementation of GST across the country.

Section 109 of Chapter XVIII under Central Goods and Services Tax Act empowers the Central Government to constitute, on the recommendation of Council, by notification, 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. The Bombay High Court has recently reiterated to CBIC to follow the three month limitation period as mentioned in the Circular No. 132/2/2020, dated 18th March 2020, to file appeals against orders of the lower appellate authority.

The Bombay High Court thus directed the CBIC, Revenue and State that, “The period of filing the Appeal will stand extended as indicated in Clause 4. 2 of the Circular dated 18 March 2020. The impugned order will not be given effect until two weeks after the period prescribed for filing an appeal as under Clause 4.

2 of the Circular dated 18 March 2020 is over. ” The Court further directed that, “the Respondent-Board issues instructions to incorporate Clause 4. 2 of the Circular dated 18 March 2020 in each order which is appealable to the Appellate Tribunal constituted under Section 109 of the Act.

This would guide the aggrieved parties as to the future course of conduct and reduce needless litigation in the form of filing writ petitions such as the present ones. ” This decision was in line and reaffirmed by the Bombay High Court in [W. P.

No. 2301 OF 2022 dated July 03, 2023] wherein it was held that the appeal to tribunal can be made within three months from the date of constitution of the Appellate Tribunal. The Orissa High Court stayed the GST demand on the petitioner on the ground of non constitution of the Goods and Service Tax Appellate Tribunal (GSTAT).

A Division Bench of Acting Chief Justice Dr and Justice MS Raman observed that “Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of fifteen days from today, the rest of the demand shall remain stayed during the pendency of the writ petition. ” The Orissa High Court stayed the GST demand on non constitution of the Goods and Service Tax Appellate Tribunal (GSTAT) as there was deposit of 10% of the demanded tax amount. A Division Bench of Acting Chief Justice Dr BR Sarangi and Justice MS Raman observed that “Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of fifteen days from today, the rest of the demand shall remain stayed during the pendency of the writ petition.

” The Orissa High Court stayed the impugned tax demand since the Goods and Service Tax Appellate Tribunal was not constituted for considering the appeal. A two-judge bench comprising Dr Justice B R Sarangi and Justice M S Raman held that “since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of fifteen days from today, the rest of the demand shall remain stayed during the pendency of the writ petition. ” The Patna High Court has held that the GST dep cannot deprive the benefit of the assessee due to non-constitution of the tribunal and directed to file an appeal under section 112 of the Bihar Goods and Services Tax Act (B.

G. S. T.

Act), 2017. The Court held that the petitioner cannot be deprived of the benefit, due to the non- constitution of the Tribunal by the respondents themselves. Since the order is being passed due to non-constitution of the Tribunal by the respondent authorities, the petitioner would be required to present/file his appeal under Section 112 of the B.

G. S. T.

Act, once the Tribunal is constituted and made functional and the President or the State President may enter the office. While staying deposit of balance tax amount the High Court of Patna held that non-constitution of Goods and Service Tax appellate tribunal should not deprive assesee’s statutory benefit under section 112(9) of the Bihar Goods and Services Tax Act, 2017. The bench of Justice Madhuresh Prasad observed that, “If the petitioner makes a deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.

G. S. T.

Act, then the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B. G. S.

T. Act, for he could not be deprived of the benefit, due to non constitution of the Tribunal by the respondents themselves”. In a recent judgment, the Patna High Court bench comprising of Acting Chief Justice Chakradhari Sharan Singh and Justice Madhuresh Prasad observed that the non-constitution of GST Appellate tribunal deprives Life Insurance Corporation of India’s right to appeal under BGST and directed to file an appeal under section 112 of the Bihar Goods and Services Tax Act (B.

G. S. T.

Act), 2017. A two-member bench comprising of Chakradhari Sharan Singh, ACJ and Madhuresh Prasad J observed that non-constitution of the Appellate Tribunal caused deprivation to the petitioner’s statutory right to appeal under Section 112(8)(9) and held that 20 percent of the remaining tax in dispute is required to be deposited by the petitioner with due diligence if he is genuinely desirous of availing the remedy of appeal within four(4) weeks. The Patna High Court stayed the recovery of the balance tax amount from the petitioner on the ground of non -constitution of GST appellate tribunal.

The Court of Chief Justice K. Vinod Chandran and Justice Madhuresh Prasad, noted that “The petitioner cannot be deprived of the benefit, due to the non-constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed.

It is not in dispute that similar relief has been granted by this Court in the case of SAJ Food Products Pvt. Ltd. vs.

The State of Bihar & Others. ” In a recent case, the Orissa High Court stayed the tax demand till the pendency of the writ subject to the deposit of tax amount due to non-constitution of the GST Appellate Tribunal. A Coram Comprising of Justice B R Sarangi and Mr Justice M S Raman observed that “since the petitioner wants to avail the remedy under the provisions of law by approaching the 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of four weeks and the rest of the demand shall remain stayed during the pendency of the writ petition.

” In a recent judgment, the Patna High Court directed the assessee to file an appeal under section 112 of the Bihar Goods and Services Tax Act (B. G. S.

T. Act). While disposing of the Writ Petition, Chief Justice K Vinod Chandran and Justice Madhuresh Prasad, held that if the petitioner makes to deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.

G. S. T.

Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B. G. S.

T. Act. The petitioner cannot be deprived of the benefit, due to non-constitution of the Tribunal by the respondents themselves.

The Andhra Pradesh High Court remanded back matter to primary authority on non-constitution of GST Tribunal in a matter relating to the restoration of GST Registration. The Court of Justices U Durga Prasad Rao and V Gopala Krishnan Rao “In that view of the matter and as the GST Tribunal has not been constituted as per the provision of the Act so as to enable the petitioner to pursue his further legal remedies, in the interest of justice, we consider it aposite to allow the writ petition and remit the matter back to the primary authority. ” A Division bench of Patna High Court granted relief to the petitioner due to the absence of the Goods and Appellate Tribunal (GSTAT).

The High Court stayed the recovery of the balance amount of the Goods and Services Tax (GST). The bench was composed of Chief Justice K. Vinod Chandran and Justice Madhuresh Prasad noted that the petitioner must be granted the legal benefit of a stay under Sub-Section (9) of Section 112 of the B.

G. S. T.

Act, subject to the deposit of a sum equal to 20% of the outstanding amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B. G. S.

T. Act. A Single Bench of the Madras High Court noted that Writ Jurisdiction can be Invoked in view of Non-Constitution of GST Tribunal.

The Court also noted that “Having not done so, the only interim protection that can be granted for the petitioner is to give protection in respect of the impugned attachment orders for a limited period of two weeks to enable the petitioner to approach this Court, challenging the orders of the Appellate Authority by filing a separate Writ Petition. ” Hence the Court directed the petitioner to file a separate Writ Petition, challenging the order of the Appellate Authority viz. , Deputy Commissioner (ST) GST – Appeal, within a period of two weeks from the date of receipt of a copy of the order.

In a recent judgment, the Patna High Court (HC) Bench consisting Acting Chief Justice Chakradhari Sharan Singh and Justice Madhuresh Prasad granted relief to the business tycoon Shapoorji Pallonji & Co. In the absence of the GST Appellate Tribunal, the High Court stayed the recovery of the remaining sum of tax due under the Goods and Services Tax (GST). The bench decided that “subject to verification of the fact of deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, or deposit of the same, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.

G. S. T.

Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B. G. S.

T. Act, for he cannot be deprived of the benefit, due to the non- constitution of the Tribunal by the respondents themselves. ” In a recent decision, the Orissa High Court ordered the deposit of the entire tax demand as an interim measure after considering the fact of the non-constitution of the Goods and Service Tax Appellate Tribunal (GSTAT).

A Division Bench of Justices BR Sarangi and MS Raman observed that “Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of four weeks from today, the rest of the demand shall remain stayed during the pendency of the writ petition. ” The Orissa High Court in the absence of the constitution of the Goods and Service Tax Appellate Tribunal (GSTAT), has directed to deposit the entire tax demand within the period of fifteen days. The division bench comprising Dr Justice B R Sarangi and Justice Murahari Sri Raman held that “Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of fifteen days from today, the rest of the demand shall remain stayed during the pendency of the writ petition.

” The Patna High Court directed to file an appeal under section 112 of the Bihar goods and services tax act 2017 (BGST Act) since the order preventing the assessee from availing the benefit of stay the recovery of balance GST amount passed in absence of Tribunal by GST authorities. A Coram comprising Justice Madhuresh Prasad held that since the order is being passed due to non-constitution of the Tribunal by the respondent-Authorities, the petitioner would be required to present/file his appeal under Section 112 of the B. G.

S. T. Act, once the Tribunal is constituted and made functional and the President or the State President may enter the office.

The appeal would be required to be filed observing the statutory requirements after coming into existence of the Tribunal, for facilitating consideration of the appeal. © 2020 Taxscan © 2020 Taxscan.