While legal experts commended the appointment of the first president of the GST Appellate Tribunal (GSTAT), they opined that the government needs to also expedite the appointment of judicial and technical members to operationalise the Appellate Tribunal. The government, on May 6 appointed Justice (retd) Sanjaya Kumar Mishra as president of the GSTAT.
An expert said, “This is certainly a welcome step, which was overdue for various legal and administrative reasons. GSTAT is still a bit far from reality as the appointment of other judicial and technical members is yet to be done. GSTAT’s judicial functions can only start after such appointments”. He noted that as an administrative head of the Appellate Tribunal, Mishra can push for appointments at GSTAT to give it full effect.
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Benches of every tribunal in India must have a judicial member and a technical member. A judicial member is an expert on legal procedure while the technical member is an expert on the law a tribunal is adjudicating on. For instance, in the National Company Law Appellate Tribunal (NCLAT), the judicial members are usually retired high court judges while the technical members are bureaucrats who retired from the Finance Ministry, Law Ministry or Commerce Ministry. According to a parliamentary response, a total of 14,227 GST appeals are pending as of August 2023, merely months after the GST council decided to notify the tribunal.
Another expert said, “The appointment of the President of the GST Tribunal is a welcome move. The GST Tribunal is set of have a principal bench at Delhi and 31 State Benches. To have a fully functional GST Tribunal across all locations in India will require appointment of judicial and technical members – the process of which may itself take few months.”
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What is GSTAT?
The GSTAT has been formed nearly seven years after the law was passed by Parliament in 2017. The appellate tribunal was not notified for seven years owing to administrative reasons.
Litigants have been approaching the high courts by way of writ petitions in case of disputes arising from GST law, adding more caseload to high courts which are already overburdened. The GSTAT will have its principal bench in Delhi with 31 regional benches. Once implemented, GSTAT would become the only central tax tribunal in the country with these many regional benches.
Since GST replaced central excise, service tax, additional customs duty and state-level value-added tax, the GSTAT will be a successor to the Customs Excise Service Tax Appellate Tribunal (CESTAT) and State VAT tribunals.
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When the department raises a claim against a GST payer, the latter can contest the claim at various levels, starting from the Adjudicating Officer (known as ‘proper officer’ in GST law) to the Supreme Court. If the taxpayer receives an unfavourable order from the Adjudicating Officer, the taxpayer can approach the Appellate Authority (Commissioner of Appeals); the order of the appellate authority is appealable in the tribunal.
On December 20, 2023, Parliament passed the Central Goods and Services Tax (Second Amendment) Bill, 2023, making way for the establishment of the GSTAT. The bill raises the cap on age for the president and members of the GSTAT to 70 years and 67 years, respectively. Currently, the age limit for the president is 67 years and for members is 65 years. The bill also seeks to align the provisions of the Central GST Act with the Tribunal Reforms Act, 2021.
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An advocate said, “The GSTAT has been a long way coming and with the appointment of the president a day ago, there is hope for those aggrieved by adverse orders under the GST Act. The appointment of the other two members of the Tribunal viz., the two technical members is on the anvil”.
Club appeals with similar issues for swift disposal:
He said, “Since the trade has waited for almost seven years to file appeals against the orders of Appellate Commissioners, the GST Tribunal at the start itself will be faced with a herculean task of tackling the pending litigation”.
He noted that digitisation of records and providing virtual platforms for hearing in all benches will be helpful in tackling the accumulated pendency. He opined that the tribunal must also consider introducing innovative steps like clubbing and disposing of appeals consisting of similar questions of law to ensure timely disposal of appeals.
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Another advocate said, “ GSTAT will be flooded with appeals which have piled up. Ideally, it would want to bunch the appeals together having common issues and its Registry should have done that work before the tribunal starts hearing matters”.
He opined that the tribunal must not take an aggressive approach to cases which more often lead to an interference by the Supreme Court.
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