GOODS AND SERVICES TAX APPELLATE TRIBUNAL

[Mr. M. GOVINDARAJAN]

GST Appellate Tribunal

• Section 109(1) of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) provides that the Government shall 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.

Types of Appellate Tribunal

• Section 109(2) of the Act provides that the powers of the Appellate Tribunal shall be exercisable by-
• the National Bench;
• Regional Benches; and
• State Bench and Benches (Area Benches).

National Bench

• Section 109(3) of the Act provides that the National Bench of the Appellate Tribunal shall be situated at New Delhi. 
• The National Bench shall be presided over by the President and shall consist of-
• one Technical Member (Centre); and
• one Technical Member (State).

Regional Benches

• Section 109(4) of the Act provides that the Government shall, by notification, constitute such number of Regional Benches as may be required.
•  Such Regional Benches shall consist of-

• a Judicial Member,
• one Technical Member (Centre); and
• one Technical Member (State)

State Bench and Area Bench

• Section 109(6) of the Act provides that the Government shall, by notification, specify for each State or Union territory a Bench of the Appellate Tribunal for exercising the powers of the Appellate Tribunal within the concerned State or Union territory.
• 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.
• 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.
• The State Bench or Area Benches shall have jurisdiction to hear appeals against the orders passed by the Appellate Authority in the cases involving matters related to the place of supply.
• Each State Bench and Area Benches of the Appellate Tribunal shall consist of-

• a Judicial Member,
• one Technical Member (Centre); and
•  one Technical Member (State).

• The State Government may designate the senior most Judicial Member in a State as the State President.

Appointment of Members of National Bench and Regional Bench

• The President and the Judicial Members of the National Bench and the Regional Benches shall be appointed by the Government after consultation with the Chief Justice of India or his nominee. 
• In the event of the occurrence of any vacancy in the office of the President by reason of his death, resignation or otherwise, the senior most Member of the National Bench shall act as the President until the date on which a new President, appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his office. 
• Where the President is unable to discharge his functions owing to absence, illness or any other cause, the senior most Member of the National Bench shall discharge the functions of the President until the date on which the President resumes his duties.
• The Technical Member (Centre) and Technical Member (State) of the National Bench and Regional Benches shall be appointed by the Government on the recommendations of a Selection Committee consisting of such persons and in such manner as may be prescribed.
• The Judicial Member of the State Bench or Area Benches shall be appointed by the State Government after consultation with the Chief Justice of the High Court of the State or his nominee.
• The Technical Member (Centre) of the State Bench or Area Benches shall be appointed by the Central Government and Technical Member (State) of the State Bench or Area Benches shall be appointed by the State Government in such manner as may be prescribed.
• Before appointing any person as the President or Members of the Appellate Tribunal, the Central Government or the State Government, shall satisfy itself that such person does not have any financial or other interests which are likely to prejudicially affect his functions as such President or Member.

Qualification of President

• A person shall not be qualified for appointment as the President, unless he has been a Judge of the Supreme Court or is or has been the Chief Justice of a High Court, or is or has been a Judge of a High Court for a period not less than five years.

Qualification of Judicial Member

• A person shall not be qualified for appointment as a Judicial Member, unless he-

• has been a Judge of the High Court; or
• is or has been a District Judge qualified to be appointed as a Judge of a High Court; or
• is or has been a Member of Indian Legal Service and has held a post not less than Additional Secretary for three years;

Qualification of Technical Member (Center)

• A person shall not be qualified for appointment as a Technical Member (Centre) unless he is or has been a member of Indian Revenue (Customs and Central Excise) Service, Group A, and has completed at least 15 years of service in Group A.

Qualification of Technical Member (State)

• A person shall not be qualified for appointment as a Technical Member (State) unless he is or has been an officer of the State Government not below the rank of Additional Commissioner of Value Added Tax or the State goods and services tax or such rank as may be notified by the concerned State Government on the recommendations of the Council with at least 3 years of experience in the administration of an existing law or the State Goods and Services Tax Act or in the field of finance and taxation.

Transfer of Members

• The Government, in consultation with the President may, for the administrative convenience, transfer-

• any Judicial Member or a Member Technical (State) from one Bench to another Bench, whether National or Regional; or
• any Member Technical (Centre) from one Bench to another Bench, whether National, Regional, State or Area.

• 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.

Financial and administrative powers of President

• The President shall exercise such financial and administrative powers over the National Bench and Regional Benches of the Appellate Tribunal as may be prescribed.
• The President shall have the authority to delegate such of his financial and administrative powers as he may think fit to any other Member or any officer of the National Bench and Regional Benches, subject to the condition that such Member or officer shall, while exercising such delegated powers, continue to act under the direction, control and supervision of the President.

Salary and allowances

• The salary, allowances and other terms and conditions of service of the President, State President and the Members of the Appellate Tribunal shall be such as may be prescribed.  Neither salary and allowances nor other terms and conditions of service of the President, State President or Members of the Appellate Tribunal shall be varied to their disadvantage after their appointment.

Tenure

• The President of the Appellate Tribunal shall hold office for a term of 3 years from the date on which he enters upon his office, or until he attains the age of 70 years, whichever is earlier and shall be eligible for reappointment.
• The Judicial Member of the Appellate Tribunal and the State President shall hold office for a term of 3 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 reappointment.
• The Technical Member (Centre) or Technical Member (State) of the Appellate Tribunal shall hold office for a term of 5 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 reappointment.

Resignation by Members

• The President, State President or any Member may, by notice in writing under his hand addressed to the Central Government or, as the case may be, the State Government resigns from his office.   
• The President, State President or Member shall continue to hold office until the expiry of three months from the date of receipt of such notice by the Central Government, or, as the case may be, the State 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 Members

• The Central Government may, after consultation with the Chief Justice of India, in case of the President, Judicial Members and Technical Members of the National Bench, Regional Benches or Technical Members (Centre) of the State Bench or Area Benches, and the State Government may, after consultation with the Chief Justice of High Court, in case of the State President, Judicial Members, Technical Members (State) of the State Bench or Area Benches, may remove from the office such President or Member, who-

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

The President, State 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.

• The President or a Judicial and Technical Member of the National Bench or Regional Benches, Technical Member (Centre) of the State Bench or Area Benches shall not be removed from their office except by an order made by the Central Government on the ground of proved misbehavior or incapacity after an inquiry made by a Judge of the Supreme Court nominated by the Chief Justice of India on a reference made to him by the Central Government and of which the President or the said Member had been given an opportunity of being heard.
• The Judicial Member or Technical Member (State) of the State Bench or Area Benches shall not be removed from their office except by an order made by the State Government on the ground of proved misbehavior or incapacity after an inquiry made by a Judge of the concerned High Court nominated by the Chief Justice of the concerned High Court on a reference made to him by the State Government and of which the said Member had been given an opportunity of being heard.

Suspension of members

• The Central Government, with the concurrence of the Chief Justice of India, may suspend from office, the President or a Judicial or Technical Members of the National Bench or the Regional Benches or the Technical Member (Centre) of the State Bench or Area Benches in respect of whom a reference has been made to the Judge of the Supreme Court.
• The State Government, with the concurrence of the Chief Justice of the High Court, may suspend from office, a Judicial Member or Technical Member (State) of the State Bench or Area Benches in respect of whom a reference has been made to the Judge of the High Court.

Non appealable orders

• Notwithstanding anything to the contrary in any provisions of this Act, no appeal shall lie against any decision taken or order passed by an officer of central tax if such decision taken or order passed relates to any one or more of the following matters-

• an order of the Commissioner or other authority empowered to direct transfer of proceedings from one officer to another officer; or
• an order pertaining to the seizure or retention of books of account, register and other documents; or
• an order sanctioning prosecution under this Act; or
• an order passed under section 80.

Procedure in filing appeal before Tribunal

Appeal by aggrieved person

• Any person aggrieved by an order passed against him under section 107 of this Act or the SGST Act or the UTGST Act may appeal to the Appellate Tribunal against such order within 3 months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal.
•  The appeal shall be filed in Form GST APL-05, on the common portal.
• A provisional acknowledgement shall be issued to the appellant immediately.
• A certified copy of the decision or order appealed against shall be submitted to the Registrar within 7 days of the filing of the appeal.
• A final acknowledgement, indicating the appeal number shall be issued thereafter in Form GST APL-02 by the Registrar.  
• The date of filing of the appeal shall be the date of the issue of the provisional acknowledgement and where the said copy is submitted after 7 days, the date of filing of the appeal shall be the date of the submission of such copy.

Appeal by Department

• The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or Commissioner of Union territory tax, call for and examine the record of any order passed by the Appellate Authority CGST Act or the SGST Act or the UTGST Act for the purpose of satisfying himself as to the legality or propriety of the said order.
• He may, by order, direct any officer subordinate to him to apply  in Form GST APL-07, to the Appellate Tribunal within 6 months from the date on which the said order has been passed for determination of such points arising out of the said order as may be specified by the Commissioner in his order
• The authorized officer makes an application to the Appellate Tribunal.
• Such application shall be dealt with by the Appellate Tribunal as if it were an appeal made against the order.

Memorandum of cross objections

• On receipt of notice that an appeal has been preferred under this section, the party against whom the appeal has been preferred may, notwithstanding that he may not have appealed against such order or any part thereof, file, within 45 of the receipt of notice, a memorandum of cross-objections, verified in the in Form GST APL-06 against any part of the order appealed against.
• Such memorandum shall be disposed of by the Appellate Tribunal, as if it were an appeal presented within the time.

Refusal of appeal

• The Appellate Tribunal may, in its discretion, refuse to admit any such appeal where the tax or input tax credit involved or the difference in tax or input tax credit involved or the amount of fine, fee or penalty determined by such order, does not exceed ₹ 50,000/-.

Delay condonation

• The Appellate Tribunal may admit an appeal within 3 months after the expiry of the period or permit the filing of a memorandum of cross-objections within 45 days after the expiry of the period, if it is satisfied that there was sufficient cause for not presenting it within that period.

Pre deposit

• No appeal shall be filed, unless the appellant has paid––

• in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and
• a sum equal to 20% of the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of section 107, arising from the said order subject to a maximum of ₹ 50 crores, in relation to which the appeal has been filed.

• Where the appellant has paid the pre deposit as mentioned above, the recovery proceedings for the balance amount shall be deemed to be stayed till the disposal of the appeal.

Fees

• The fees for filing of appeal or restoration of appeal shall be ₹ 1000/- for every ₹ 1 lakh of tax or input tax credit involved or the difference in tax or input tax credit involved or the amount of fine, fee or penalty determined in the order appealed against, subject to a maximum of ₹ 25,000/-.

Authorized representative

• The expression ‘authorized representative’ shall mean a person authorized by the person to appear on his behalf, being-
  • his relative or regular employee; or
  • an advocate who is entitled to practice in any court in India, and who has not been debarred from practicing before any court in India; or
  • any chartered accountant, a cost accountant or a company secretary, who holds a certificate of practice and who has not been debarred from practice; or
  • a retired officer of the Commercial Tax Department of any State Government or Union territory or of the Board who, during his service under the Government, had worked in a post not below the rank than that of a Group-B Gazetted officer for a period of not less than 2 years.  Such officer shall not be entitled to appear before any proceedings under this Act for a period of 1 year from the date of his retirement or resignation;
  • any person who has been authorized to act as a goods and services tax practitioner on behalf of the concerned registered person.

• The Authorized representative shall not be disqualified on any of the grounds mentioned in section 116 (3).

Powers of Appellate Tribunal

• The Appellate Tribunal shall not, while disposing of an appeal before it, be bound by the procedure laid down in the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice and subject to the other provisions of this Act and the rules made there under, the Appellate Tribunal shall have power to regulate its own procedure.
• The Appellate Tribunal shall, for the purposes of discharging its functions under this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit in respect of the following matters-

• summoning and enforcing the attendance of any person and examining him on oath;
• requiring the discovery and production of documents;
•  receiving evidence on affidavits;
• subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872, requisitioning any public record or document or a copy of such record or document from any office;
•  issuing commissions for the examination of witnesses or documents;
• dismissing a representation for default or deciding it ex parte;
•  setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and
• any other matter which may be prescribed.

• All proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of sections 193 and 228, and for the purposes of section 196 of the Indian Penal Code, and the Appellate Tribunal shall be deemed to be civil court for the purposes of section 185 and Chapter XXVI of the Code of Criminal Procedure, 1973.

Hearing

• In the absence of a Member in any Bench due to vacancy or otherwise, any appeal may, with the approval of the President or, as the case may be, the State President, be heard by a Bench of two Members.
• Any appeal where the tax or input tax credit involved or the difference in tax or input tax credit involved or the amount of fine, fee or penalty determined in any order appealed against, does not exceed ₹ 5 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 bench consisting of a single member.
• The Appellate Tribunal may, give the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.
• The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing.  No such adjournment shall be granted more than 3 times to a party during hearing of the appeal.
• The Appellate Tribunal shall, as far as possible, hear and decide every appeal within a period of 1 year from the date on which it is filed.

Order

• The Appellate Tribunal may pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the Appellate Authority or to the original adjudicating authority, with such directions as it may think fit, for a fresh adjudication or decision after taking additional evidence, if necessary.
• The Appellate Tribunal shall send a copy of every order passed under this section to the Appellate Authority or the original adjudicating authority, as the case may be, the appellant and the jurisdictional Commissioner or the Commissioner of State tax or the Union territory tax.

Amendment of order

• The Appellate Tribunal may amend any order passed by it so as to rectify any error apparent on the face of the record, if such error is noticed by it on its own accord, or is brought to its notice by the Commissioner or the Commissioner of State tax or the Commissioner of the Union territory tax or the other party to the appeal within a period of 3 months from the date of the order.
• No amendment which has the effect of enhancing an assessment or reducing a refund or input tax credit or otherwise increasing the liability of the other party, shall be made under this sub-section, unless the party has been given an opportunity of being heard.

Binding nature of order

• The orders passed by the Appellate Tribunal on an appeal, unless appeal filed before High Court or Supreme Court,  shall be final and binding on the parties.

Refund of pre deposit

• Where an amount paid by the appellant as re deposit is required to be refunded consequent to any order of the Appellate Tribunal, interest at the rate specified under section 56 shall be payable in respect of such refund from the date of payment of the amount till the date of refund of such amount.

Difference of opinion

• 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.

Execution of order

• Any order made by the Appellate Tribunal may be enforced by it in the same manner as if it were a decree made by a court in a suit pending therein, and it shall be lawful for the Appellate Tribunal to send for execution of its orders to the court within the local limits of whose jurisdiction,-

•  in the case of an order against a company, the registered office of the company is situated; or
• in the case of an order against any other person, the person concerned voluntarily resides or carries on business or personally works for gain.

Sums due to be payable

• Notwithstanding that an appeal has been preferred to the High Court or the Supreme Court, sums due to the Government as a result of an order passed by the National or Regional Benches of the Appellate Tribunal or an order passed by the State Bench or Area Benches of the Appellate Tribunal or an order passed by the High Court under section 117, as the case may be, shall be payable in accordance with the order so passed.

Appellate Tribunal comes true?

• The Government, on the recommendations of the GST council has notified State Benches for Andhra Pradesh, Bihar, Chhattisgarh, Delhi, Goa, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Maharashtra, Odisha, Puducherry, Punjab, Tamil Nadu, Telengana, Tripura, Uttarakhand, West Bengal, Assam, Arunachal Pradesh, Manipur, Nagaland, Sikkim.

• In ‘Revenue Bar Association v. Union of India, GST Council’ – 2019 (9) TMI 983 – Madras High Court,  the constitution of the Goods and Services Tax Appellate Tribunal and the qualification and appointment of members has been challenged before Madras High Court by the petitioners.  The Madras High Court held as below-

• Section 110(1)(b)(iii) of the CGST Act which states that a Member of the Indian Legal Services, who has held a post not less than Additional Secretary for three years, can be appointed as a Judicial Member in GSTAT, is struck down.
• Section 109(3) and 109(9) of the CGST Act, 2017, which prescribes that the tribunal shall consists of one Judicial Member, one Technical Member (Centre) and one Technical Member (State), is struck down.

• Due to the above decision of Madras High Court, the Centre could not constitute Appellate Tribunals.   Therefore the appeal could not be filed against the order of the Appellate Authority before Appellate Tribunal within the limitation period.   In order to remove difficulty arising in giving effect to the above provision of the Act, the Government, on the recommendations of the Council, has issued the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019.
• It has been provided through the said Order that the appeal to tribunal can be made within

3 months (6 months in case of appeals by the Government) from the date of communication of order or date on which the President or the State President, as the case may be, of the Appellate Tribunal enters office, whichever is later.

How to file appeal?

• In the absence of Appellate Tribunal, the appeal against the order of the Appellate Authority could not be filed. 
• The limitation period will be over when the Appellate Tribunal is established.
• The clarification has been issued for this that appeals before the Appellate Tribunal can be filed within 3 months when the President of the Appellate Tribunal enters his office after its constitution by means of an order.
• In ‘A.B. Enterprises v.  The  State of UP through its Principal Secretary, Institutional Finance, Government of UP and 2 others’ – 2020 (6) TMI 215 – Allahabad High Court, the petitioner has preferred the instant petition under Article 226 of the Constitution challenging the seizure orders MOV 06 dated 31.7.2018 and consequential order MOV 09 dated 2.8.2018, passed by respondent no. 3 and also order dated 27.11.2019, passed by respondent no. 2 under Section 107(11) of the GST Act and has also prayed for a direction to the respondent authorities to refund the deposited amount to the petitioner.  The impugned orders are appealable under Section 112 of the C.G.S.T. Act, 2017. The appeal is to be filed within 90 days from the date on which the order sought to be appealed is communicated to the person preferring the appeal.  The instant petition has been filed by-passing the remedy of appeal under Section 112 of the Act on the ground that the appellate tribunal has not been constituted till date.

It has been pointed out by learned standing counsel that the Government, having regard to the difficulty faced by the assessees in filing appeal on account of non-constitution of the Tribunal and its Benches in various States and Union Territories, has issued Central Goods and Service Tax (Ninth Removal of Difficulties) Order, 2019 notified in the Gazette of India dated 3^rd  December, 2019 stipulating that in such a situation, the three months' period shall be considered to be the date on which the President or the State President, as the case may be, of the Appellate Tribunal after its constitution under Section 109, enters office.

The instant petition is disposed of by providing that the petitioner can invoke the remedy of filing appeal before the Tribunal in terms of the provisions of the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019.

• Since the limitation for filing against the order of Appellate Authority before the Appellate Tribunal is running currently till the constitution of Appellate Tribunal, the order of Appellate Authority will not attain its finality and no action could be initiated against the order of the Appellate Authority.