The Central Goods and Service Tax Act, 2017 (CGST Act) in Section 109 mandates the constitution of a Goods and Service Tax Appellate Tribunal (GSTAT) and its Benches. Under the GST laws, the GSTAT would be a specialized appellate authority for resolving disputes.
GSTAT has not yet been applied even after 5 years of GST execution. Multiple reasons exist for the late GSTAT creation such as the qualification and experience criteria of technical members, the number and constitution of Benches, and the figure of a search and selection committee.
GSTAT absence in the states would occur because of the ripple effect in GST administration, in which the disappointed assessee suffers within the adverse order via revenue heads and poses with no choice, he only could approach the jurisdictional High Court, in writ jurisdiction for relief.
Bombay HC: 3 Months Time Period to Appeal After GSTAT Formation
Bombay High Court mentioned that under the GST regime, all the applicants shall obtain three months’ time to appeal post building the GST appellate tribunal. For certain 10,000 assesses the order would arrive as a relief whose writ petitions on GST are due in different HCs while having no resolution procedure.
The petition to the tribunal could be incurred within 3 months from the communication date of the order or the date on which the president or the state president according to the case of the appellate tribunal arrive in office whichever is later, a bench of Justices GS Kulkarni and Jitendra S Jain expressed in their ruling on a writ petition by Essar Steel Suppliers.
Against the tax order through the commissioner, appeals, within 3 months of the order, the assessees can appeal. But no tribunal shall be there the assessee would either be stuck or would proceed to different high courts with the writ petitioner asking for a stay against the GST tax orders.
50th GST Council Meeting Updates for GSTAT
For a smooth constitution and functioning of the GST Appellate Tribunal, the Council has recommended the Rules governing the appointment and conditions of its Chairman and Members.
As part of the recommendation, the GST Council suggested that the Centre notify the Finance Act, 2023 pertaining to the GST Appellate Tribunal with effect from 01.08.2023 in order to bring the same into operation as soon as possible.
According to Section 110(4)(b)(iii) of the CGST Act 2017, the council has recommended that the Maharashtra Chief Secretary be nominated to the Search Committee Selection Committee. A phase-wise approach was decided regarding the number of State Benches.
Pressure on High Courts
The High courts have been loaded with cases and the pandemic-related delays would be imposed to sit in the same writ jurisdiction to hear the assessee.
There is a lower experience for the mentioned case than this High Court in order to deal with the GST or couldn’t accommodate the cases on the board expeditiously because of the due backlog.
Tax Issues Faced by Taxpayers Without GSTAT
The disappointed assessee despite having a complete balance of convenience in favour would have no choice but to wait for justice and the revenue heads pressed aggressively for the execution of their own orders and executed the recovery as per the outcome. The GSTAT creation would have gained critical importance and has today enacted the need of the hour. In a recent proceeding, a petition was furnished to the Apex court asking about the priority of the constitution of the GSTAT, a Division Bench of Justices
DY Chandrachud and Hima Kohli, rendered that the central Government furnish an expedited reply and through a linked special leave published the case for the final hearing.
Suggestions for GSTAT to GST Council by GoM
The central government has indeed held off on the matter and the GST Council in June 2022, set up a 6-member Group of Ministers (GoM) to discuss several concerns that the states are asking regarding the constitution of the GSTAT.
GoM agreed on the outlines and the framework of putting up the GSTAT and would submit its suggestions to be opted by the GST Council.
GoM report addresses the subject of the states and the additional facts regarding the establishment of the GSTAT which were challenged by various High courts of the country.
The suggestions inter alia furnish that the principal bench of the GSTAT would get set up in New Delhi, and the bigger states on the grounds of population or any additional specified criteria such as GST enrolled assessee and others could set up to 5 benches.
GSTAT benches would be led via a judge of the Supreme Court or a Chief Justice of the State High Court or a Chief Justice of the State High Court. The relaxation towards the kind of appointment of technical members (from the present mandate of 25-year experience requirement), indeed it is critical to note that an amendment to Section 110 of the CGST Act, to substitute the word “Government” with “State Government” for permitting the states to practice their jurisdiction to determine experience conditions and additional process to assign members of the GSTAT.
The last, the revision will open the doors for the qualified members of the bar to get appointed as judicial members, for which a challenge was supported via the Madras High Court.
GoM Guidance for GSTAT Members’ Appointment
The additional essential suggestion of GoM would set the selection committee for the appointment of members.
The same would be anticipated that a 4 member committee administered by either the Chief Justice of India or his representative judge will be assigned, the appointment of members to the Benches.
This committee, the President of the GSTAT, a Union Government Secretary of appropriate rank, and the State Chief Secretary of the separate state.
The suggestions would be chosen for acknowledgement via the GST council same would be crucial that the same considerations wouldn’t take excessive time. The time duration which would have been passed has incurred the GST environment for the taxpayer, in an opposite way, and is not effective for the businesses sometimes for the cause which could not be attributed to them.
Domino Effect of Delaying GSTAT Setup
These delays incurred a ripple effect and stutter the working of the GST framework. The needed but much more use of the writ jurisdiction to decide cases would incur higher pressure on the already loaded justice system and the renders to the delays in furnishing the relief to the real assesses.
Considering all the factors the GSTAT must be developed on a quicker basis so that the same might incur a smooth introduction and not be ended at birth by cascading boulders of pending litigation.
