Constitution of GSTAT: A Chronological Analysis with Time Limit to file appeal before GSTAT

[CA Bimal Jain]

On May 06, 2024, Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman administered the oath to Justice (Retd.) Sanjay Kumar Mishra, Former Chief Justice Jharkhand High Court, as the President of the GST Appellate Tribunal. The appointment of the Hon’ble President marks the beginning of a significant event in GST Dispute Resolution as any person who was aggrieved by the appellate order (OIA) or revisional order passed under Section 107 and Section 108 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”), who had to seek relief before the Hon’ble High Court by way of filing writ petition due to non-constitution of the tribunal.

As per Section 109(1) of the CGST Act, the Government, on the recommendation of the GST Council, by way of Notification, is empowered to establish an Appellate Tribunal, which is to be referred to as the Goods and Services Tax Appellate Tribunal (“GSTAT”) for hearing of appeals against the order passed by the Appellate Authority or Revisional Authority.

To analyse the impact of the recent developments, it is important to highlight the journey of the formation of GSTAT, which can be understood through the timeline enumerated below:

• On the basis of the recommendation made in the 32nd GST Council Meeting dated January 10, 2019, the Central Government vide Notification No. S.O. 1359 (E) dated March 13, 2019 notified the creation of the national bench of the GSTAT with effect from the date of publication.
• However, the provisions of Sections 109 and 110 of the CGST Act, relating to the constitution of the Appellate Tribunal and the appointment of the President and Members of the Appellate Tribunal, qualifications, and related conditions of services were challenged before the Hon’ble Madras High Court in the case of REVENUE BAR ASSOCIATION VERSUS UNION OF INDIA, THE GOODS AND SERVICES TAX COUNCIL, THE STATE OF TAMIL NADU - 2019 (9) TMI 983 - MADRAS HIGH COURT wherein it was recommended that the amendment should be introduced to include lawyers as eligible persons for appointment as judicial members, which was further challenged in the Hon’ble Supreme Court. 
• Pursuant to the aforesaid judgment and on the basis of recommendation made in the 49th GST Council Meeting dated February 18, 2023, the amendment was introduced in Section 109 and Section 110 of the CGST Act, by way of the Finance Act, 2023 with effect from August 1, 2023 wherein the number of judicial members in the State Bench were increased and the lawyers were included as an eligible person for appointment as judicial members.
• The Central Government, on the recommendations of the GST Council, constituted the State benches of GSTAT at various locations as per Notification bearing F. No. A-50050/150/2018- CESTAT-DoR dated September 14, 2023.
• Also, the Central Government by way of Notification No. F. No A-50050/69/2023-CESTAT-DOR dated October 25, 2023, made the rules relating to the Appointment and Conditions of President and Members of GSTAT, i.e., GSTAT (Appointment & Conditions of Service of President & Members) Rules 2023.
• Further, on the basis of recommendations made in the 49th GST Council Meeting dated February 18, 2023, the Central Government by way of Notification No. - S.O. 1(E) - Central GST (CGST) dated December 29, 2023, approved the constitution of the Principal Bench of the GSTAT located at New Delhi.
• The Department of Revenue vide Press Release dated February 15, 2024 invited applications for the post of various members of the GSTAT.
• The Appointment Committee of the Cabinet, based on the recommendation of the Search cum-Selection Committee, approved the appointment of Justice (Retd.) Sanjay Kumar Mishra, Former Chief Justice Jharkhand High Court as the president of GSTAT.

What is the time limit to file Appeal before the GSTAT:

With the Appointment of the Hon’ble President of the GSTAT, the pressing issue in the present scenario would be the calculation of the time limit prescribed for filing of Appeal. The main problem is that the appointment process of judicial and technical members has not yet started in full swing. The government notified the Vacancy to fill up the posts of 63 judicial members and 32 technical Members in the Principal Bench, which is still pending.

Earlier, the CBIC vide Central Goods and Services Tax (Ninth Removal of Difficulties Order) dated December 03, 2019 (“ROD Order”) read with Circular No. 132/02/2020-GST dated March 18, 2020 (“the Circular”) was issued wherein clarification was provided that the appeal before the GSTAT should be filed within three months or six months in case of Government appeal from the date of communication of the order or from the date on which the President or State President of the Appellate Tribunal would assume office, whichever is earlier. The Relevant Portion of the aforesaid ROD Order and the Circular has been reproduced herein for reference:

ROD Order:

“2. For the removal of difficulties, it is hereby clarified that for the purpose of calculating,-

(a) the “three months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal” in sub-section (1) of section 112, the start of the three months period shall be considered to be the later of the following dates:-

(i) date of communication of order; or

(ii) the date on which the President or the State President, as the case may be, of the Appellate Tribunal after its constitution under section 109, enters office;

(b) the “six months from the date on which the said order has been passed” in sub-section (3) of section 112, the start of the six months period shall be considered to be the later of the following dates:-

(i) date of communication of order; or

(ii) the date on which the President or the State President, as the case may be, of the Appellate Tribunal after its constitution under section 109, enters office.”

The Circular:

“4.2 The appellate tribunal has not been constituted in view of the order by Madras High Court in case of Revenue Bar Assn. v. Union of India and therefore the appeal cannot be filed within three months from the date on which the order sought to be appealed against is communicated. In order to remove difficulty arising in giving effect to the above provision of the Act, the Government, on the recommendations of the Council, has issued the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019. It has been provided through the said Order that the appeal to tribunal can be made within three months (six months in case of appeals by the Government) from the date of communication of order or date on which the President or the State President, as the case may be, of the Appellate Tribunal enters office, whichever is later.”

Hence, the ‘3 months’ time limit for filing an appeal by taxpayers to the GSTAT has already started from May 06, 2024”. So, there is a pressing need for the GST Council to issue a special order in this regard for extending the time limit for filing appeals by taxpayers to the GSTAT because the appointment process of judicial and technical members has not yet started in full swing in the light of vacancy notified by the Government to fill up the posts 63 judicial members and 32 technical Members in the Principal Bench.

Simultaneously, taxpayers should gear up to keep the draft appeals ready, as the time limit to file an appeal to the GSTAT is approaching, and they will be notified very soon.

(Author can be reached at [email protected])