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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 ..... tion, 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 Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 Gha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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; B - Issue a Writ, order or direction in the nature of certiorari quashing the impugned order dated 2.4.2018 7.2.2018 ( Annexure-1 2 ) passed by Respondents No. 4 5 respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority, 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 certiorari calling for and examining DO No. 20/GST dated 29th May 2020 dated 29.5.2020 submitted by Respondent No. 2 before Respondent No. 6 and also the approval of Respondent No. 6 in its 40th meeting held on 12th June, 2020, in so far it relates to creation of State Bench of Goods and Services Tax Appellate Tribunal at Lucknow and quashing the said DO No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal 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 prescribed. From a bare reading of the provision of the Act itself it is clear that it is not in the domain of the State Government to make a recommendation for deciding the place of the State Bench of the Tribunal. The role of the State is confined to determine the place of area benches. Insofar as the determination of location of the State Bench is concerned, it remains in the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mongst 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 services tax; (e) the rates including floor rates with bands of goods and services tax; (f) any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster; (g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and (h) any other matter relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal 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) and one Technical Member (State). (5) The National Bench or Regional Benches of the Appellate Tribunal shall have jurisdiction to hear appeals against the orders passed by the Appellate Authority or the Revisional Authority in the cases where one of the issues involved relates to the place of supply. (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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint 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) any Judicial Member or a Member Technical (State) from one Bench to another Bench, whether National or Regional; or (b) any Member Technical (Centre) from one Bench to another Bench, whether National, Regional, State or Area. (13) The State Government, in consultation with the State President may, for the administrative convenience, transfer a Judicial Member or a Member Technical (State) from one Bench to another Bench within the State. (14) No act or proceedings of the Appellate Tribunal shall be q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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/ proposal of the State Government dated 05.03.2019 filed as annexure-2 to the affidavit dated 15.10.2019 of respondent No.1 (Union of India), is reproduced below : 11. The aforequoted proposal dated 05.03.2019 was discussed by the State Government with the GST Council and, therefore, the State Government decided to propose only 4 Area Benches instead of 19 Area Benches. Consequently, proposal for 4 area benches, reiterating the State Bench at Prayagraj, was sent by the State Government to the GST Council vide DO Letter N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal 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 observations made in an interim order and whether on which count the revised proposal is sustainable as a valid exercise of power. .. 50. In the present case, the legislation, namely, GST Act, 2017 has been enacted and has come into force with effect from 01.07.2017. Under the said enactment, various authorities have to be set up, namely, GST Council, and the GST Council was authorised to make recommendations to the Government for constitution of the regional Benches and State Benches. 51. In view of the above discussion, the amended prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 having National/Regional Benches at National level and the State / Area Benches at State level, to hear appeals against orders passed by the Appellate Authority or by the Revisional Authority (Enclosed in Agenda circulated for reference). 15.1. While the proposal of states and UTs for creation of State and Area Benches of Goods and Services Tax Appellate Tribunal was considered in the 35th and 37th meeting of the GST Council, the proposal for the State of Uttar Pradesh could not be considered as the Hon'ble High Court of Allahabad, Lucknow Bench had quashed the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21147 / 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 creation of State and Area Benches of Goods and Services Tax Appellate Tribunal was considered in the 35th, 37th, 38th and 39th meeting of the GST Council. 16.1. He further stated that in the 39th GST Council meeting the Council approved the proposal for creating State Bench of Goods and Services Tax Appellate Tribunal for the State of Uttar Pradesh at Allahabad and 4 Area Benches at Ghaziabad, Lucknow, Varanasi and Agra. He then asked JS, DoR, GoI to apprise the Council of the latest update. 16.2 JS, DoR, GoI stated that a fresh proposal was received from the State of Uttar Pradesh vide DO. No 20/GST dated 29th May, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffidavit 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 enclosed herewith and marked as Annexure No. I . 4. It is submitted that the Hon'ble Court of Allahabad, Allahabad Bench vide its order dated 28.02.2019 in W.P. No. 655/2018 held that the Appellate Tribunal should be set up in Allahabad following the decision of Apex Court in the matter of Madras Bar Association which provides the Tribunal should be set up at the place where the Principal Bench of the High Court is situated. Accordingly, UP State vide their letter dated 05.03.2019 revised their proposal dated 21.02.2019 to the extent that the State Bench of the Appellate Tribunal should be constituted at Allahabad along with 19 Area Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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), it has been stated as under: 5. That, thereafter Additional Chief Secretary, Government of U.P. sent a revised proposal dated 05.03.2019 to the Finance Secretary and Secretary, G.S.T. Council for constitution of State Bench of the Tribunal at Allahabad and 19 Area Benches in different districts. A copy of revised proposal sent by the Additional Chief Secretary, Government of U.P. dated 05.03.2019 is being filed herewith and marked as Annexure No. S.C.A.-2 to this affidavit. 6. That, under Section 109 of the Goods and Services Tax Act, 2017, it is the Central Government which has to specify for each State and Indian Territory a bench of Appellate Tribunal as St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enches 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 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 39t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, 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 system of justice after Oudh area was acceded to by Britishers (East India Company) in 1856. Judicial system for Oudh area was governed by Statute governing judicial system in Oudh, then changed by various statutes and commencing from Act No.XIV of 1865 abd followed by Act No.XXXII of 1871 i.e. 'Oudh Civil Courts Act' and subsequent Statutes enacted thereafter. In 1925 vide Oudh Courts Act, a Chief Court for Oudh was constituted consisting of one Chief Judge and four Puisne Judges. They continued till U. P. High Courts (Amalgamation) Order, 1948 was enacted amalgamating both Courts at Lucknow and Allahabad in one High Court called as 'High Court of Judicature at Allahabad'. Though Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 not vice versa. This shows that High Court at Allahabad has residuary authority. It can hear matters within jurisdiction of Judges sitting at Lucknow but not vice versa. All this go to show that New High Court at Allahabad can be termed as Principal Seat of High Court. 121. Question (1) therefore, is answered by holding that Allahabad or Lucknow cannot be said to be a Permanent Seat of High Court and no such permanence in respect of seat has been visualized or provided by U.P. High Courts (Amalgamation) Order, 1948 as held by Constitution Bench in Sri Nasiruddin (supra) but Principal Seat of 'High Court of Judicature at Allahabad' is at 'Allahabad'. 29. Thus, there is no conflict between the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 proposal dated 29.05.2020 is unsustainable and is accordingly quashed. Consequently, the Agenda Item No.7 of 40th Meeting of the Council, based on the aforesaid proposal of the Commissioner dated 29.05.2020, can also not be sustained and is hereby quashed. The GST Council has taken the decision in its 39th Meeting dated 14.03.2020 vide Agenda Item No.6 for creation of the State Bench at Allahabad (Prayagraj) and Four Area Benches in Ghaziabad, Lucknow, Varanasi and Agra. Once the Council has recommended, vide Agenda Item No.6 of the 39th Meeting held on 14.03.2020, the matter automatically fell within the jurisdiction of the Central Government to exercise its powers under Section 109(6) of the CGST Act. This position also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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