2018 (8) TMI 1140 - HC - GST

Constituting Appellate Tribunal under GST - Doctrine of separation of powers and independence of judiciary - Vires of Sections 109 and 110 of the Central Goods and Service Tax Act, 2017 - Held that - Since the vires of Sections 109 and 110 of the Central Goods and Service Tax Act, 2017 and Tamil Nadu Goods and Service Tax Act, 2017, constituting Appellate Tribunal and the qualification, appointment and condition of services of its members is under challenge, notice be also issued to the learned Attorney General of India, through the Additional Solicitor General of India returnable six weeks hence.

Summary

Issues:
Challenge to vires of Sections 109 and 110 of CGST Act and TNGST Act regarding Appellate Tribunal constitution and member qualifications.

Analysis:
The writ petition challenges the constitution of the Appellate Tribunal under the CGST Act and TNGST Act, specifically Sections 109 and 110, regarding the qualification, appointment, and conditions of service of its members. The petitioner argues that these provisions violate the doctrine of separation of powers and the independence of the judiciary, citing precedents like Union of India v. R. Gandhi and Kesavananda Bharati vs. State of Kerala. The petitioner highlights the differences in the composition of the Appellate Tribunal under the Pre-GST and Post-GST regimes, emphasizing the importance of maintaining a balance between judicial and technical members for effective functioning.

The petitioner points out that under the Pre-GST regime, the Central Excise, Custom and Service Tax Appellate Tribunal (CESTAT) had a bench consisting of one Judicial Member and one Technical Member, ensuring quasi-judicial independence. However, post-GST, the constitution of the Appellate Tribunal includes a two-tier system with National Bench/Regional Benches, raising concerns about the balance between Judicial Members and Technical Members. The petitioner argues that the number of Technical Members should not exceed the Judicial Members, as technical expertise should support but not overshadow judicial powers.

Moreover, the petitioner challenges the qualification criteria for Judicial Members, which seemingly exclude advocates, raising issues of inequality of opportunity for legal professionals. The petitioner asserts that advocates possess essential qualities for effective judicial functioning and should not be excluded from serving as Judicial Members in Tax Tribunals. The petitioner's submissions are supported by legal precedents and emphasize the importance of legal expertise and experience in those entrusted with judicial or quasi-judicial powers.

The Court, after hearing the petitioner's counsel, acknowledges prima facie concerns regarding the constitution of the Appellate Tribunal, finding it contrary to established legal principles. Consequently, the Court orders notice to be issued to the respondents and the Attorney General of India for further proceedings. The Court clarifies that the views expressed in the order are preliminary and will not influence the final decision. The matter is scheduled for further hearing before the roster Bench on a specified date.