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2021 (2) TMI 435 - HC - GSTConstitution of State Bench of GST Tribunal - Interpretation of Section 109(6) of the CGST Act/ U.P. GST Act - Seeking to constitute 'Regional Bench' and 'State Bench' for the State of U.P, at the seat of jurisdictional High Court and also such number of Area Benches in the State of U.P - seeking direction that Rule 138 of UPGST Rules under which Notification No.1014 dated 21.7.2017 was issued prescribing e-way bill 01, gets automatically revived on rescinding of Notification No.138 dated 30.1.2018 - Section 109 of the CGST Act and Section 109 of the U.P. GST Act - HELD THAT - It is evident that the petitioners as well as respondents are in agreement on the following points (a) The Central Government shall, by notification, specify a State Bench of the Appellate Tribunal in view of Section 109(6) of the CGST Act and Section 109(2) of the U.P. GST Act. (b) The State Government has a role only in creation of Area Benches to the extent that it can request for such number of Area Benches it desires. The Central Government, on receipt of a request of any State Government, shall constitute such number of Area Benches in that State as may be recommended by the Council. Thus, the recommendation of the Council for creation of Area Benches on request of the State Government is required to enable the Central Government to constitute Area Benches. (c) The creation of State Bench of Appellate Tribunal at Prayagraj (Allahabad) and Area Benches at Lucknow, Ghazibad, Varanasi and Agra was approved in the 39th meeting of the GST Council. After approval/ recommendation of the GST Council in its 39th meeting dated 14.03.2020, the matter fell within the powers of the Central Government alone to issue notification in exercise of powers under Section 109(6) of the CGST Act. (d) The State Government has no power under Section 109(6) of the CGST Act or Section 109 of the U.P. GST Act to specify for State Bench of Appellate Tribunal. It is solely within the domain of the Central Government. In the case of Oudh Bar Association High Court, Lucknow 2019 (6) TMI 103 - ALLAHABAD HIGH COURT , Luckow Bench of this Court held vide para-44 that out of two seats of High Court of Judicature at Allahabad, one at Lucknow and other at Allahabad, none of which is permanent. The provisions of Section 109 of the CGST Act/ U.P. GST Act, were not under consideration in the aforesaid case except that in concluding portion of the order, a reference to Section 109 has been made holding that the seat where the Tribunal is to be established is an issue which is in the domain of executive in terms of Section 109. The aforesaid case was filed by an Advocates Association. The present writ petitions have been filed by the dealers of different districts, namely Banda, Kanpur Nagar, Kanpur, Mathura, Lalitpur, Meerut, Aligarh, NOIDA/G.B. Nagar, Bijnor, Agra, Ghaziabad, Bulandshahar, Jhansi and Moradabad, against the order passed by authorities under CGST Act/ U.P. GST Act and their main argument is of interpretation of Section 109 of the CGST Act/ U.P. GST Act and the relief has been sought for establishing the State Bench and Area Benches. Coming back to the proceedings before the GST Council; perusal of Agenda Item No.7 of the 40th Meeting of the Council held on 12.06.2020 as reproduced in Para-19 above, goes to show that the recommendation has been made on the basis of DO Letter No.20/GST dated 29th May, 2020 for creation of State Bench and Area Benches of the Goods and Services Tax Appellate Tribunal, for the State of Uttar Pradesh. The D.O. Letter No.20/GST dated 29.05.020 as reproduced in Para-18 above would show that it is a letter written by the Commissioner Commercial Tax, who is an Officer under the U.P. GST Act and appointed by the State Government by notification, as evident from the definition of the word Commissioner under Section 2(24) read with Sections 3 and 4 of the U.P. GST Act, 2017. The earlier proposals dated 05.03.2019 and 15.03.2019 were of the State Government through its Additional Chief Secretary, who is the competent authority. The proposal of the State Government for creation of State Bench at Allahabad dated 05.03.2019 has neither been quashed by any court nor has been withdrawn by the State Government. It is pertinent to mention that dealers in the State of Uttar Pradesh falling under the CGST Act/ U.P. GST Act and aggrieved with the orders of first appellate authority under Section 107, have been left remediless inasmuch as Appellate Tribunal under the Act is not available in the State of Uttar Pradesh for preferring appeals under Section 112 of the CGST Act/ U.P. GST Act. The Appellate Tribunal being the last fact finding authority and its not availability in the State of Uttar Pradesh, is causing serious prejudice to the rights of aggrieved persons for statutory appeal which is continuing since the enactment of the CGST Act/ U.P. GST Act. In peculiar facts and circumstances of the case and in view of the legislative mandate of Section 109(6) of the CGST Act, we direct as under (i) The GST Council shall forward its recommendation of Agenda Item No.6 of the 39th Meeting held on 14.03.2020 to the Central Government/ respondent No.1 within two weeks from today. (ii) Thereafter, the respondent No.1/ Central Government shall, within next four weeks, specify by notification in terms of sub-Section (6) of Section 109 of the CGST Act the State Bench at Prayagraj (Allahabad), of the Goods and Services Tax Appellate Tribunal and four Area Benches at Ghaziabad, Lucknow, Varanasi and Agra, in the State of Uttar Pradesh for exercising the powers of the Appellate Tribunal. (iii) The respondent Nos.1, 2, 3 and 6 shall ensure that the State Bench and the Area Benches of the Appellate Tribunal (Goods and Service Tax Appellate Tribunal) in the State of Uttar Pradesh are made functional as far as possible from 01.04.2021. (iv) Since the challenge to the impugned orders relates to questions of fact and the Appellate Tribunal is the last fact finding authority, therefore, we leave it open for all the petitioners to challenge the impugned orders before the Appellate Tribunal under Section 112 of the CGST Act/ U.P. GST Act as and when the State Bench and Area Benches of the Appellate Tribunal are constituted in the State of Uttar Pradesh. However, till expiry of the period of limitation for filing appeals under Section 112 of the CGST Act after establishment of the State Bench and Area Benches or till appeals are filed, whichever is earlier, no coercive action shall be taken against the petitioners herein pursuant to the impugned orders passed by the first authority or the first appellate authority. Liberty is also granted to the petitioners to avail such remedy as available to them under law in respect of other reliefs which have not been considered and decided by this judgment.
Issues Involved:
1. Constitution of the Goods and Services Tax Appellate Tribunal (GSTAT) for the State of Uttar Pradesh. 2. Validity of the proposal for the creation of State and Area Benches of GSTAT. 3. Interpretation of Section 109(6) of the CGST Act and U.P. GST Act. 4. Jurisdiction and authority of the Central and State Governments in constituting GSTAT Benches. 5. Impact of the non-availability of GSTAT on the rights of aggrieved persons. Issue-wise Detailed Analysis: 1. Constitution of the Goods and Services Tax Appellate Tribunal (GSTAT) for the State of Uttar Pradesh: The petitioners sought the constitution of a 'Regional Bench' and 'State Bench' for the State of U.P. at the seat of the jurisdictional High Court and such number of 'Area Benches' as recommended by the GST Council. The court noted that the Central Government is mandated under Section 109(6) of the CGST Act to specify a State Bench of the Appellate Tribunal and that the State Government can request the creation of Area Benches, which the Central Government may constitute based on the Council's recommendation. 2. Validity of the Proposal for the Creation of State and Area Benches of GSTAT: The court examined the proposals sent by the State Government on 05.03.2019 and 15.03.2019, recommending the creation of a State Bench at Allahabad and four Area Benches at Ghaziabad, Lucknow, Agra, and Varanasi. These proposals were initially approved by the GST Council in its 39th meeting on 14.03.2020. However, a subsequent proposal dated 29.05.2020 by the Commissioner of Commercial Tax, U.P., recommending a State Bench at Lucknow and three Area Benches, was found to be in contradiction to the earlier proposals and was quashed by the court. 3. Interpretation of Section 109(6) of the CGST Act and U.P. GST Act: The court emphasized that Section 109(6) of the CGST Act mandates the Central Government to specify a State Bench for each State or Union Territory. The State Government's role is limited to requesting the creation of Area Benches. The court held that the Central Government must act on the GST Council's recommendations to notify the State Bench and Area Benches. 4. Jurisdiction and Authority of the Central and State Governments in Constituting GSTAT Benches: The court clarified that the Central Government has the sole authority to specify the State Bench of the Appellate Tribunal, while the State Government can request the creation of Area Benches. The GST Council's recommendation is necessary for the Central Government to constitute Area Benches. The court quashed the proposal by the Commissioner of Commercial Tax, U.P., as it was not a proposal of the State Government and contradicted the earlier approved proposals. 5. Impact of the Non-availability of GSTAT on the Rights of Aggrieved Persons: The court noted that the non-availability of the GSTAT in Uttar Pradesh has left aggrieved persons without a statutory appellate remedy since the enactment of the CGST Act. The court directed the GST Council to forward its recommendation from the 39th meeting to the Central Government and for the Central Government to notify the State Bench at Prayagraj and the Area Benches at Ghaziabad, Lucknow, Varanasi, and Agra within a specified timeframe. The court also directed that no coercive action be taken against the petitioners until the establishment of the GSTAT Benches. Conclusion: The writ petitions were disposed of with directions to ensure the constitution and functioning of the State Bench and Area Benches of the GSTAT in Uttar Pradesh. The reliefs sought by the petitioners were granted, and the court emphasized the need for compliance within the stipulated timeframe.
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