Formation and implementation of GST Appellate Tribunal (‘GSTAT’) has been a subject matter of debates and it is interesting to closely observe the canvas on which entire controversy of non-constitution of GSTAT is concerned. Now that GSTAT has been constituted it needs to be seen how it can be a blessing for taxpayers.
Introduction
Tribunalisation law in India has been subject matter of challenges before Constitutional Courts. In this regard, the Supreme Court of India in the case of Union of India v. R. Gandhi
The provisions relating to GSTAT are engrafted in Section 109 and Section 110 of the CGST Act. Section 109(4) of the CGST Act inter-alia provided that Benches of GSTAT shall consist of a Judicial Member, one Technical Member (Centre) and one Technical Member (State).
However, the legislative insufficiencies were raised before the High Court of Madras in the case of Revenue Bar Association v. Union of India
It was held that proceedings before GSTAT are judicial proceedings and accordingly, judicially trained minds cannot be in minority to deal with complex intricacies of GST law.
Due to complexities and diversities, it was not possible to constitute the GSTAT unless the defects had been remedied. Author succinctly states that recently a PIL was also filed in the Supreme Court wherein Court specifically asked the Centre about status of GSTAT. The aforesaid PIL and SLP against Revenue Bar Association (supra) have been clubbed together and are pending before Supreme Court.
Thus, due to the aforesaid complexities and issues, GSTAT could not be made operative.
Proposals of 49th GST Council Meeting
The GST Council at its 49 th Meeting inter-alia adopted the report of Group of Ministers (‘GoM’) which was formed after the 47th Council Meeting held in June 2022. The press announcement after the 49th Council Meeting suggests that there have been minor legislative and language changes which shall, post approval from States, be finalised by March 3, 2023. These shall ultimately be a part of Finance Act, and for this purpose, the Chairperson of GST Council has been authorised to carry out necessary changes and functions.
It further revealed that the Tribunal Benches shall comprise of two Judicial Members and two Technical Members. Notably, all four members shall not hear the proceedings before GSTAT. The proceedings shall be heard by Single Member Bench or Division Bench and for this purpose monetary limits shall be prescribed. The States shall have a flexibility regarding number of State level benches.
In a recent case before Supreme Court, CCE & ST v. Bilfinder Neo Structo Construction Limited , Union of India agreed that appeals before GSTAT shall be electronic and in paper-less mode. Hence, it is expected that GSTAT shall operate in an electronic and paperless way.
The legislative changes proposed with regard to composition of GSTAT are in line with Supreme Court decision in the case of R. Gandhi (supra). Hence, it would be interesting to watch the equal representation of Centre and States at the benches. Author strenuously contends that this is the advent of GST 2.0 as GSTAT is set to remove hazy clouds and shed some light on litigative issues.
GSTAT: A blessing for the taxpayers
The non-constitution of GSTAT had burdened the Writ Courts since taxpayers had to opt remedy under Article 226 of the Indian Constitution, whereby the High Court granted the stay over demand. However, the ghosts of demand used to haunt the taxpayers as High Courts would give the stay on payment of more than 30 percent of the demanded amount.
Reference is also invited to the matters of Anti-Profiteering wherein stay was given only after payment of 100 percent amount. Hypothetically, if Anti-Profiteering matters would have fallen within of GSTAT, stay would have been granted on payment of lesser amount and the taxpayers could have also availed the option of getting the matters addressed at GSTAT level without invoking Article 226 of the Indian Constitution.
Furthermore, fact based cases which were to be addressed by the GSTAT had to be dealt in by High Court and accordingly, High Courts were burdened with too many cases. Now that GSTAT has been constituted, High Courts shall be concerned with substantial question of law as stipulated in Section 117 of the CGST Act.
Interestingly, if e-filing of appeals before GSTAT is allowed, taxpayers would be in a position to make the pre-deposit so as to stop the burden of interest and thus need not invoke Writ jurisdiction. Hence, the Constitution of GSTAT is a major step in the litigation landscape of GST.
Conclusion
Whilst the legislative insufficiencies in provisions of CGST Act with respect to GSTAT have now been taken care of, the road ahead for GSTAT is still tough in light of infrastructural challenges which may arise for formation of Benches at various locations. It would be fascinating to observe out for GST 2.0 as this would be the dawn of new sunrise as regards GST litigation horizon is concerned.
—The author, Abhishek A Rastogi, is the founder of Rastogi Chambers. The views expressed are strictly personal.
Read his previous articles here
(Edited by : C H Unnikrishnan)
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