GST APPELLATE TRIBUNAL - PRINCIPAL BENCH AND STATE BENCHES

[Mr. M. GOVINDARAJAN]

Introduction

In respect of dispute on tax matters, whether direct taxes or indirect taxes, the assessee is to challenge the order of Assessing Officer/Adjudicating Authority before the Appellate Authority prescribed for this purpose. If the assessee is not satisfied with the order of Appellate Authority then he can move to the Appellate Tribunal constituted for this purpose. GST laws have appellate authority for hearing appeal against the order of Assessing Officer and also Appellate Tribunals. But the provisions of Appellate Tribunals have not come into force despite more than five years and 10 months from the implementation of GST. Therefore the registered persons are suffering very much since there is no Appellate Tribunal. They are compelled to file writ petition before the High Court and to get remedy. Now the Central Government amended the provisions relating to the Appellate Tribunal in the Finance Act, 2023. These provisions have also been notified in the official gazette till date.

Finance Act, 2023

Finance Act, 2023 made amendments to Central Goods and Services Tax Act, 2017 (‘Act’ for short) including the substitution of sections in relation to constitution of Appellate Tribunal. The following sections met amendments in Finance Act, 2023-

• Section 109 - Constitution of Appellate Tribunal and Benches thereof - this section is substituted for a new section.
• Section 110 - President and Members of Appellate Tribunal, their qualification, appointment, conditions of service etc. - This section is substituted for a new section.
• Section 114 - Financial and Administrative powers of President - This section is substituted for a new section.
• Section 117 - Appeal to High Courts - some amendments were made to this section.
• Section 118 - Appeal to Supreme Court - one amendment was made to this section.
• Section 119 - Sums due to be paid notwithstanding appeal etc.

Constitution of Benches

The newly substituted section 109 of the Act provides the constitution of the Appellate Tribunal and its Benches. Section 109(1) of the Act provides that the Government shall, on the recommendations of the Council, by notification, establish 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.

Principal Bench

There shall be a Principal Bench (before amendment it is ‘National Bench’) of the Appellate Tribunal at New Delhi. The Principal Bench may consist of the President, Judicial Member, a Technical Member (Centre) and a Technical Member (State). Before amendment constitution provisions were made for the constitution of Regional Benches coming under the control of National Bench.

State Benches

On the request of the State, the Government may, by notification, constitute such number of State Benches at such places and with such jurisdiction as may be recommended by the Council, which shall consist of two Judicial Members, a Technical Member (Centre) and a Technical Member (State). The senior-most Judicial Member within the State Benches, as may be notified, shall act as the Vice-President for such State Benches and shall exercise such powers of the President as may be prescribed, but for all other purposes be considered as a Member.

Before amendment the Central Government shall specify for each State or Union Territory a Bench of the Appellate Tribunal called as ‘State Bench’ for exercising the powers of the Appellate Tribunal within the concerned State or Union territory. The State Bench is to be called as ‘Area Bench’ and other Benches are called as ‘State Benches’.

Hearing appeal

The Principal Bench and the State Bench shall hear appeals against the orders passed by the Appellate Authority or the Revisional Authority. The cases, in which any one of the issues involved relates to the place of supply, shall be heard only by the Principal Bench.

Appeals, where the tax or input tax credit involved or the amount of fine, fee or penalty determined in any order appealed against, does not exceed Rs.50 lakhs 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 single Member, and in all other cases, shall be heard together by one Judicial Member and one Technical Member.

If, after hearing the case, the Members differ in their opinion on any point or points, such Member shall state the point or points on which they differ, and the President shall refer such case for hearing,-

• where the appeal was originally heard by Members of a State Bench, to another Member of a State Bench within the State or, where no such other State Bench is available within the State, to a Member of a State Bench in another State;
• where the appeal was originally heard by Members of the Principal Bench, to another Member from the Principal Bench or, where no such other Member is available, to a Member of any State Bench,

and such point or points shall be decided according to the majority opinion including the opinion of the Members who first heard the case.

Powers of Principal Bench

The President shall, from time to time, by a general or special order, distribute the business of the Appellate Tribunal among the Benches and may transfer cases from one Bench to another.

Powers of Government

The Government may, in consultation with the President, for the administrative efficiency, transfer Members from one Bench to another Bench. A Technical Member (State) of a State Bench may be transferred to a State Bench only of the same State in which he was originally appointed, in consultation with the State Government.

Qualifications of Members

Section 110 provides the qualification, appointment and condition of services of the President and Members of the Appellate Tribunal.

• President - The President shall be a Judge of the Supreme Court or is or has been the Chief Justice of a High Court.
• Judicial Member - The Judicial Member shall be a Judge of the High Court or has, for a combined period of ten years, been a District Judge or an Additional District Judge.
• Technical Member (Centre) - The Technical Member shall be a member of the Indian Revenue (Customs and Indirect Taxes) Service, Group A, or of the All India Service with at least three years of experience in the administration of an existing law or goods and services tax in the Central Government, and has completed at least twenty-five years of service in Group A.
• Technical Member (State) - The Technical Member (State) shall be an officer of the State Government or an officer of All India Service, not below the rank of Additional Commissioner of Value Added Tax or the State goods and services tax or such rank, not lower than that of the First Appellate Authority, as may be notified by the concerned State Government, on the recommendations of the Council and has completed 25 years of service in Group A, or equivalent, with at least three years of experience in the administration of an existing law or the goods and services tax or in the field of finance and taxation in the State Government.

The State Government may, on the recommendations of the Council, by notification, relax the requirement of completion of 25 years of service in Group A, or equivalent, in respect of officers of such State where no person has completed 25 years of service in Group A, or equivalent, but has completed 25 years of service in the Government, subject to such conditions, and till such period, as may be specified in the notification.

Appointment of Members

The President, Judicial Member, Technical Member (Centre) and Technical Member (State) shall be appointed or re-appointed by the Government on the recommendations of a Search-cum-Selection Committee. The Committee shall recommend a panel of two names for appointment or re-appointment to the post of the President or a Member, as the case may be.

The Search-cum-Selection Committee for Technical Member (State) of a State Bench shall consist of the following members-

• the Chief Justice of the High Court in whose jurisdiction the State Bench is located, to be the Chairperson of the Committee;
• the senior-most Judicial Member in the State, and where no JudiciaI Member is available, a retired Judge of the High Court in whose jurisdiction the State Bench is located, as may be nominated by the Chief Justice of such High Court;
• Chief Secretary of the State in which the State Bench is located;
• one Additional Chief Secretary or Principal Secretary or Secretary of the State in which the State Bench is located, as may be nominated by such State Government, not in-charge of the Department responsible for administration of State tax; and
• Additional Chief Secretary or Principal Secretary or Secretary of the Department responsible for administration of State tax, of the State in which the State Bench is located — Member Secretary.

While making selection for Technical Member (State) of a State Bench, first preference shall be given to officers who have worked in the State Government of the State to which the jurisdiction of the Bench extends.

The Search-cum-Selection Committee for all other cases shall consist of the following members-

• the Chief Justice of India or a Judge of Supreme Court nominated by him, to be the Chairperson of the Committee;
• Secretary of the Central Government nominated by the Cabinet Secretary — Member;
• Chief Secretary of a State to be nominated by the Council — Member;
• one Member, who-

• in case of appointment of a President of a Tribunal, shall be the outgoing President of the Tribunal; or
• in case of appointment of a Member of a Tribunal, shall be the sitting President of the Tribunal; or
• in case of the President of the Tribunal seeking re-appointment or where the outgoing President is unavailable or the removal of the President is being considered, shall be a retired Judge of the Supreme Court or a retired Chief Justice of a High Court nominated by the Chief Justice of India; and

• Secretary of the Department of Revenue in the Ministry of Finance of the Central Government — Member Secretary.

The Chairperson shall have the casting vote and the Member Secretary shall not have a vote. No appointment or re-appointment of the Members of the Appellate Tribunal shall be invalid merely by reason of any vacancy or defect in the constitution of the Search-cum-Selection Committee.

Tenure of Members

The President of the Appellate Tribunal shall hold office for a term of 4 years from the date on which he enters upon his office, or until he attains the age of 67 years, whichever is earlier and shall be eligible for re-appointment for a period not exceeding 2 years.

The Judicial Member, Technical Member (Centre) or Technical Member (State) of the Appellate Tribunal shall hold office for a term of 4 years from the date on which he enters upon his office, or until he attains the age of 65 years, whichever is earlier and shall be eligible for re-appointment for a period not exceeding 2 years.

Salary

The salary of the President and the Members of the Appellate Tribunal shall be such as may be prescribed and their allowances and other terms and conditions of service shall be the same as applicable to Central Government officers carrying the same pay. The salary and allowances nor other terms and conditions of service of the President of Members of the Appellate Tribunal shall be varied to their disadvantage after their appointment. if the President or Member takes a house on rent, he may be reimbursed a house rent higher than the house rent allowance as are admissible to a Central Government officer holding the post carrying the same pay, subject to such limitations and conditions as may be prescribed.

Resignation

The President or any Member may, by notice in writing under his hand addressed to the Government, resign from his office. The President or Member shall continue to hold office until the expiry of 3 months from the date of receipt of such notice by the Government or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest.

Removal of Member

The Government may, on the recommendations of the Search-cum-Selection Committee, remove from the office President or a Member, who-

1. has been adjudged an insolvent; or
2. has been convicted of an offence which involves moral turpitude; or
3. has become physically or mentally incapable of acting as such President or Member; or
4. has acquired such financial or other interest as is likely to affect prejudicially his functions as such President or Member; or
5. has so abused his position as to render his continuance in office prejudicial to the public interest.

The President or the Member shall not be removed on any of the grounds specified in clauses (d) and (e), unless he has been informed of the charges against him and has been given an opportunity of being heard.

Suspension of Member

The Government, on the recommendations of the Search-cum-Selection Committee, may suspend from office, the President or a Judicial or Technical Member in respect of whom proceedings for removal have been initiated.

Restrictions on Members

Subject to the provisions of Article 220 of the Constitution, the President or other Members, on ceasing to hold their office, shall not be eligible to appear, act or plead before the Principal Bench or the State Bench in which he was the President or, as the case may be, a Member.

Financial and Administrative Powers of President

Section 114 of the Act provides that the President shall exercise such financial and administrative powers over the Appellate Tribunal as may be prescribed.

Appeal to High Court

Section 117(1) of the Act provides that any person aggrieved by any order passed by the State Benches (before amendment ‘Area Bench’ or State Bench) of the Appellate Tribunal may file an appeal to the High Court and the High Court may admit such appeal, if it is satisfied that the case involves a substantial question of law. Section 117(5) of the Act provides that the High Court may determine any issue which–

• has not been determined by the State Benches; or
• has been wrongly determined by the State Benches, by reason of a decision on such question of law.

Appeal to Supreme Court

Section 118(1) of the Act provides that an appeal shall lie to the Supreme Court from any order passed by the Principal Bench of the Appellate Tribunal.