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TMI Blog2021 (2) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel and other learned counsel for the petitioners, Sri Shashi Prakash, learned Additional Solicitor General of India assisted by Sri Krishna Agarwal, Sri K.J. Shukla, Sri R.C. Tiwari, Sri Anant Kumar Tiwari, learned counsel and other learned counsel for the Indirect Taxes/Central Government and Sri Manish Goel, learned Additional Advocate General assisted by Sri C.B. Tripathi, learned Special Counsel appearing for the State-respondents. 2. With the consent of learned counsels for the parties, Writ Tax No.655 of 2018 has been treated as the leading writ petition and only the relief relating to the constitution of the Goods and Services Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal') under the Central Goods and Services Tax Act, 2017 (hereinafter referred to as 'the CGST Act')/ U.P. Goods and Services Tax Act, 2017 (hereinafter referred to as 'the U.P. GST Act'), is being decided and all other questions are left open. 3. Reliefs sought in Writ Tax No.655 of 2018, are reproduced below: "A- Issue a writ, order or direction in the nature of mandamus commanding respondents No. 1 & 2 to constitute 'Regional Bench' and 'State Bench' for the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners have filed these writ petitions for reason that the Tribunal under Section 109 of the CGST Act has not been constituted so far by the Government, i.e. the Central Government, under Section 109 of the CGST Act. 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. Relief being considered in this bunch of writ petitions:- 5. Now we proceed to consider the reliefs (A), (D1) and (E1) which at the cost of repetition, are reproduced hereunder: "A- Issue a writ, order or direction in the nature of mandamus commanding respondents No. 1 & 2 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, as may be recommended by Respondent No. 6; DI. Issue a writ, order or direction the nature of cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the provisions of Section 109 (6) of Central Goods & Services Tax Act, 2017 which reads as hereunder:- "(6) The Government shall, by notification, specify for each State or Union territory except for the State of Jammu and Kashmir, a Bench of the Appellate Tribunal (hereafter in this Chapter, referred to as ?State Bench?) for exercising the powers of the Appellate Tribunal within the concerned State or Union territory: Provided that for the State of Jammu and Kashmir, the State Bench of the Goods and Services Tax Appellate Tribunal constituted under this Act shall be the State Appellate Tribunal constituted under the Jammu and Kashmir Goods and Services Tax Act, 2017: Provided further that the Government shall, on receipt of a request from any State Government, constitute such number of Area Benches in that State, as may be recommended by the Council: Provided also that the Government may, on receipt of a request from any State, or on its own motion for a Union territory, notify the Appellate Tribunal in a State to act as the Appellate Tribunal for any other State or Union territory, as may be recommended by the Council, subject to such terms and conditions as may be pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inance Minister........................ Chairperson; (b) the Union Minister of State in charge of Revenue or Finance................. Member; (c) the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government....................Members. (3) The Members of the Goods and Services Tax Council referred to in sub-clause (c) of clause (2) shall, as soon as may be, choose one amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide. (4) The Goods and Services Tax Council shall make recommendations to the Union and the States on- (a) the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax; (b) the goods and services that may be subjected to, or exempted from the goods and services tax; (c) model Goods and Services Tax Laws, principles of levy, apportionment of Goods and Services Tax levied on supplies in the course of inter-State trade or commerce under article 269-A and the principles that govern the place of supply; (d) the threshold limit of turnover below which goods and services may be exempted from goods and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the recommendations of the Council or implementation thereof." Section 109 of the CGST Act:- 109.Constitution of Appellate Tribunal and Benches thereof.- (1) The Government shall, on the recommendations of the Council, by notification, constitute with effect from such date as may be specified therein, an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority. (2) The powers of the Appellate Tribunal shall be exercisable by the National Bench and Benches thereof (hereinafter in this Chapter referred to as "Regional Benches"), State Bench and Benches thereof (hereafter in this Chapter referred to as "Area Benches"). (3) The National Bench of the Appellate Tribunal shall be situated at New Delhi which shall be presided over by the President and shall consist of one Technical Member (Centre) and one Technical Member (State). (4) The Government shall, on the recommendations of the Council, by notification, constitute such number of Regional Benches as may be required and such Regional Benches shall consist of a Judicial Member, one Technical Member (Centre) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence in tax or input tax credit involved or the amount of fine, fee or penalty determined in any order appealed against, does not exceed five lakh rupees and which does not involve any question of law may, with the approval of the President and subject to such conditions as may be prescribed on the recommendations of the Council, be heard by a bench consisting of a single member. (11) If the Members of the National Bench, Regional Benches, State Bench or Area Benches differ in opinion on any point or points, it shall be decided according to the opinion of the majority, if there is a majority, but if the Members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President or as the case may be, State President for hearing on such point or points to one or more of the other Members of the National Bench, Regional Benches, State Bench or Area Benches and such point or points shall be decided according to the opinion of the majority of Members who have heard the case, including those who first heard it. (12) The Government, in consultation with the President may, for the administrative convenience, transfer- (a) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Appellate Tribunal for any other State or Union Territory, as may be recommended by the council, subject to such terms and conditions as may be prescribed. Section 109(2) of the U.P. GST Act provides that the constitution and jurisdiction of State Bench and the Area Benches located in the State shall be in accordance with the provisions of Section 109 of the CGST Act or the Rules made thereunder. Thus, sub-section (6) of Section 109 of the CGST Act clearly mandates that "State Bench of the Goods and Services Tax Appellate Tribunal" shall be constituted and notified by the Central Government but the Area Benches in such number as may be requested by the concerned State Government, may be constituted by the Central Government on the recommendation of the Council. 10. Vide DO Letter No.386/11-2-19-9(24)/19 - Institutional Finance, Tax and Registration Anubhag - 2 dated 05.03.2019, the State Government requested/ proposed to the Secretary of the GST Council New Delhi for creation of State Bench at Allahabad and 19 Area Benches at different places in the State of Uttar Pradesh. By this letter, the State Government has revised its earlier proposal dated 21.02.2019. The letter/ pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der: "44. Thus there are two Seats of the High Court of Judicature at Allahabad, one at Lucknow and the other at Allahabad, none of which is permanent. 49. Now the seat where the Tribunal is to be established is an issue which is within the domain of the Executive in terms of Section 109 of CGST Act ordinarily and is not justiciable in view of the decision of the Supreme Court in the case of Lalit Kumar (supra), wherein it was held that "that the issue with regard to setting up of permanent Bench and Circuit Benches of the Tribunal is not to be the subject matter of consideration by the judicial forum unless facts of the case are so appalling that judicial interference would be called for." There were no exceptional circumstances existing in the case, so far as the proposal dated 21.02.2019 was concerned, which was not even under challenge, therefore the same did not fall for adjudication in Writ Petition No. 655 (TAX) of 2018, on merits. As far we are concerned, we are not concerned with the issue on merits as to where the Benches should be established but we are only concerned with the issue whether the earlier proposal could have been reviewed on account of certain observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a State Bench of the Tribunal in view of the request made by the State of Uttar Pradesh. 16. Thus, even on quashing of the afore-quoted proposal of the State Government dated 15.03.2019 in PIL Civil No.6800 of 2019, the proposal of the State Government dated 05.03.2019, remained with the Council for establishing State Bench at Allahabad, which was neither under challenge in the PIL Civil No.6800 of 2019 nor it was withdrawn by the State Government. 17. Thereafter, the GST Council in 39th Meeting held on 14.03.2020, considered the issue of creation of State Bench and Area Benches in State of Uttar Pradesh vide Agenda Item No.6 and approved the proposal for creating State Bench of the Tribunal at Allahabad and Four Area Benches at Ghazibad, Lucknow, Varanasi and Agra, as under: "Agenda Item 6: Creation of the State and Area Benches of the Goods and Services Tax Appellate Tribunal (GSTAT) for the State of Uttar Pradesh 15. The Secretary introduced the agenda and stated that in terms of Section 109 of the CGST Act, 2017: Goods and Services Tax Appellate Tribunal (GSTAT) were being constituted by the Government on the recommendation of the GST Council. The Appellate Tribunal havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w Delhi. In this regard, I would like to communicate you that Government of Uttar Pradesh has decided to create total 04 benches of GSTAT including State Bench in the state i.e. State Bench in Lucknow and 03 Area benches in Varanasi, Ghaziabad, and Agra respectively, instead of 05 benches of GSTAT proposed by the state earlier, Kindly acknowledge the decision as above from Government of Uttar Pradesh. The above decision is being communicated with the due approval from the Government of Uttar Pradesh. (AMRITA SONI) To, Shri S.K. Rahman, Joint Secretary, GST Council. Phone: (Off.) - 0522-2721147 / 2721149, Fax: 0522-2721167 E-mail : [email protected], [email protected]" 19. Thereafter in its 40th meeting held on 12.06.2020, the GST Council vide Agenda Item No.7 recommended/ approved, as under: "Agenda Item7: Creation of the State and Area Benches of the Goods and Services Tax Appellate Tribunal (GSTAT) for the State of Uttar Pradesh: 16. The Secretary introduced the agenda and stated that the Chapter XVIII of the CGST Act 2017 provides for the Appeal and Review Mechanism for dispute resolution under the GST regime. The proposal of States and UTs for creati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary notification by creation of State Bench at Prayagraj and Area Benches at Ghaziabad, Lucknow, Varanasi and Agra. Stand taken by the respondent Nos.1 and 6 (Union of India and GST Council) in their affidavits:- 21. The stand taken by the respondent Nos.1 and 6 in their counter affidavits/ affidavits is, as under: (a) In paragraph 12 of the counter affidavit dated 27.07.2018 and paragraph-3(H) and para-13 of the counter affidavit dated 16.08.2018, it has been stated that under Section 109 of the CGST Act, the Central Government on the recommendation of the Council, has power to constitute "Appellate Tribunal". (b) In the affidavit dated 15.10.2019 of Sri S. Bhowmik, Under Secretary, Department of Ministry of Finance, North Block, New Delhi, filed on behalf of respondent No.1 (Union of India), it has been stated in paragraphs 3, 4, 7 and 8, as under: "3.That in terms of section 109 of the CGST Act, 2017, the UP Government vide letter dated 21.02.2019 initially requested the GST Council to consider a proposal for constitution of State Bench of GST Appellate Tribunal at Lucknow and 20 Area Benches at l6 different locations. A copy of the proposal dated 21.02.2019 is enclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : (a) In paragraphs-3, 6 and 7 of the supplementary counter affidavit dated 27.02.2019 filed on behalf of respondent No.2 (State of U.P.), it has been stated as under: "3.That under Section 109 of GST Act, 2017 the Central Government has to specify for each State and union territory, a Bench of Appellate Tribunal (hereinafter referred to as 'State Bench') and on receipt of request from the State Government constitute such number of Area Benches in the State as may be recommended by the Council. 6. That thereafter the Addl. Chief Secretary sent a recommendation to the Secretary GST Council Government of India vide letter dated 21 February, 2019 for constitution of 20 Area Benches of the Tribunal in 16 Districts including one State Bench at Lucknow. Copy of the recommendation dated 21 February, 2019 is being annexed herewith and marked as Annexure- S.C.A.-3 to this affidavit. 7. That the ultimate decision in this regard is to be taken by the Central Government as provided under Section 109 of the ACT." (b) In paragraphs-5 and 6 of the better supplementary counter affidavit dated 13.03.2019 filed on behalf of the respondent Nos.2 and 3 (State of U.P. and Commissioner), i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erogative and the GST Council being a constitutional body under Article 279A of the Constitution of India, alone can make a recommendation to the Union in respect of the location and number of benches of GSTAT. 24. Learned Additional Advocate General appearing along with Sri C.B. Tripathi, learned special counsel for the State-respondents, has taken aid of the stand taken in the counter affidavits of the State- respondents to submit that under Section 109 of the CGST Act, the Central Government has to specify for each State and Union Territory, a Bench of Appellate Tribunal (i.e. 'State Bench') and on receipt of request on the State Government to constitute such number of Area Benches in the State as may be recommended by the Council. 25. From the pleadings as briefly noted above and also the submissions made by the learned counsels for the parties, 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 creatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Cereamics Ltd. vs. Official Liquidator High Court Allahabad), decided on 17.10.2019, a Division of this Court considered the following question: "(I) Whether "Permanent Seat" and "Principal Seat" is one and the same thing and can it be said that there is no "Permanent Seat" as well as "Principal Seat" of this High Court at Allahabad and Lucknow?" 28. In the aforesaid case of Universal Insulator and Ceramics Ltd. (supra), the Division Bench exhaustively considered the history of High Court of Judicature at Allahabad and Chief Court of Oudh, the entire legislative history and the relevant provisions, and answered the afore-quoted question, as under. "117. The aforesaid historical backdrop, therefore, makes it clear that High Court at Allahabad was created by Royal Charter. Initially it was called as 'High Court of Judicature for North Western Provinces' which had the area of aforesaid Province but Oudh was a different Province, not governed by North Western Provinces. 'High Court of Judicature for North Western Provinces' subsequently became 'High Court of Judicature at Allahabad'. Judicial system at Province in Oudh area came to be governed by British ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court of Judicature at Allahabad. Superintendence of New High Court by Chief Justice, who was sitting at Allahabad at that time, continued with him. 120. The entire discussions made above at the pain of repetition leads an undoubted inference that New High Court created by U. P. High Courts (Amalgamation) Order, 1948 did not declare any 'Permanent Seat' of New High Court, but considering the fact that Chief Justice of High Court of Judicature at Allahabad i.e. existing High Court became Chief Justice of New High Court also, we have no manner of doubt to observe that 'Principal Seat of Allahabad remained at Allahabad'. This is also evident from the fact that the number of Judges to sit at Lucknow would not be less than two but how much beyond that, has to be decided by Chief Justice. All other judges would sit at Allahabad. Similarly, territorial jurisdiction of New High Court at Lucknow is subject to determination of Chief Justice, which power could have been exercised for once. In respect of remaining areas, jurisdiction remained with New High Court at Allahabad. Further in a pending case, Chief Justice may transfer the matter for hearing to Allahabad but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 31. As regards the proposal dated 29.05.2020 sent by the Commissioner, Commercial Tax U.P. Lucknow, it may be noticed that the same is in contradiction to the proposals of the State Government dated 05.03.2019 and accordingly, the same cannot be sustained. Upon a specific query made to the learned counsel appearing for the State-respondents as to whether the proposal sent by the Commissioner, Commercial Tax U.P. Lucknow could be said to be a proposal of the State Government as per the relevant "Rules of Business", the counsel appearing for the State-respondents have fairly submitted that the proposal of the Commissioner, Commercial Tax U.P. Lucknow cannot be said to be the proposal of the State Government. In view of the aforesaid position, the proposal dated 29.05.2020 forwarded by Commissioner, Commercial Tax, U.P. Lucknow being in contradiction to the proposals duly sent by the State Government on 05.03.2019, the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. 33. For all the reasons stated abo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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