2023 (2) TMI 979 - HC - GST

Writ Petitions filed invoking Article 226 of the Constitution of India - Non-constitution of Appellate Tribunal - though the statute provides an appeal to a Appellate Tribunal under Section 112 of the State Good and Services Tax Act, the Appellate Tribunal is not constituted - HELD THAT - As clarified in the Circular dated 26 May 2020, the time to file appeals/application to the Appellate Tribunal would be counted from the date the President or the State President enters the office. A large number of petitions are being filed in this Court on the ground that the GST Tribunal is not functional. Almost in all cases, protective orders are being passed. It is stated in Clause 5 of the Circular as above that a declaration in Annexure-I has to be filed before the jurisdictional tax officer stating that an appeal is proposed to be filed. If such declaration is not filed, then it would be presumed that taxpayer is not willing to file an appeal and recovery proceedings would be initiated. Therefore, the sequitur is that if such a declaration is filed, recovery proceedings will not be initiated until the prescribed time limit as specified in Clause 4.3 of the Circular. Reverting to the present Petitions, the Petitioners have already filed such a declaration under Clause 4.3 of the Circular. If the Petitioners have not filed declarations, the Petitioners are permitted to submit the same within 15 days from today. Since the Petitioners have raised various other challenges, such a declaration would be considered as without prejudice. As and when the contingency in the clause 4.3 of the Circular dated 26 May 2020 occurs, the petitioners can file an appeal or writ petition as the case may be. In light of this position, it is not deemed necessary to keep these Petitions pending on the file of this court. Clarifying that the prescribed time limit has been extended as per Clause 4.3 and protective orders are a incorporated in Clause 5 of the Circular, the writ petitions are disposed off.

Summary

Issues:
Challenging Order-in-Appeal by State Tax Authorities, absence of constituted Appellate Tribunal, validity of statutory provisions.

Analysis:
The petitioners challenged the Order-in-Appeal by State Tax Authorities, which led to filing of appeals dismissed by the Appellate Authority. The petitioners invoked Article 226 of the Constitution, arguing that the Appellate Tribunal under Section 112 of the State GST Act was not constituted, questioning the validity of statutory provisions.

The relevant Sections 109, 110, and 112 of the Maharashtra Goods & Services Tax Act were examined. Section 109 designates the Goods and Services Tax Tribunal under the Central Goods and Services Tax Act as the Appellate Tribunal. Section 110 outlines the qualifications and appointment procedures for the President and Members of the State Bench and Area Benches. Section 112 details the appeal process against orders, including the discretion to refuse admission based on monetary limits.

A Circular issued by the Commissioner of State Tax, Maharashtra, clarified the time limit for filing appeals to the Appellate Tribunal in the absence of its constitution. The Circular emphasized the need for a declaration if an appeal is proposed, extending the limitation period. The Court noted the high number of petitions due to the non-functional GST Tribunal, with protective orders being passed. Petitioners were allowed to submit declarations within a specified timeframe to avoid initiation of recovery proceedings.

The Court disposed of the writ petitions, highlighting the extension of the time limit and the protective measures outlined in the Circular. The Respondent State was urged to adopt measures to reduce writ petitions, including incorporating stipulations in orders passed by the First Appellate Authority and allowing a grace period for declaration submission. These measures aimed to minimize litigation arising from the absence of the GST Tribunal. The suggestions were to be presented to the State Commissioner of State Tax for further action, with all contentions of the parties left open.