• Notification Date: 06-03-2023
• Notification No: N/A

Revenue to Reduce Litigation amid Delay in GST Tribunal Constitution after Bombay HC

The Bombay High Court has again directed the revenue to take requisite steps to curb litigation in the absence of the Goods and Services Tax (GST) Appellate Tribunal. In the present case, the assessee, Gulf Oil Lubricants India Ltd. has challenged the validity of statutory provisions on the ground that the GST Appellate Tribunal has not been constituted yet. The Revenue is considering the proposal to allow the e-filing of petitions once the draft changes are included in the finance bill and approved, a CBIC official said. 

The company had received a Show Cause Notice, which was adjudicated, and an Order-in-Original was passed by the Revenue Department. The company had filed an appeal against the Order-in-Original before the Appellate Authority, which was dismissed. The company has filed a petition challenging the validity of the statutory provisions, as the Appellate Tribunal has not been constituted yet, even though the statute provides for an appeal to the Appellate Tribunal. The issue was whether the petition is maintainable on the ground that the GST Appellate Tribunal is not functional. 

A Division Bench of the Bombay High Court in Writ Petition No. 3097 of 2022 held that the petition is maintainable, as the time to file appeals or application to the Appellate Tribunal would be counted from the date the President or the State President enters the office. 

The Court observed that a declaration must be filed before the Respondent stating that an appeal is proposed to be filed, and if such declaration is not filed, then it would be presumed that the assessee is not willing to file an appeal, and recovery proceedings would be initiated. 

The Court further noted that since the Petitioner had already filed such a declaration, there is no prejudice to the Petitioner or any similarly situated assessee on the ground of the non-availability of the State GST Tribunal. 

Bombay High Court held that as and when the contingency occurs, the Petitioner can file an appeal or writ petition, and the prescribed time limit has been extended as per the Circular, and protective orders are incorporated in the Circular. The Court directed the Respondent to incorporate a stipulation contained in the Circular in the Order-in-Original, to put the Petitioner to notice that the time limit for filing the appeal is extended and if a declaration is filed within the stipulated period, the protective measure would automatically come into force. The Court has also directed the Respondent to incorporate the stipulation contained in the Circular in the Order-in-Original and to give a 15-day period to the Petitioner to make such a declaration. 

This is akin to the decision in Rochem India Pvt. Ltd vs The Union of India, wherein the Bombay High Court had directed that, “the Respondent-Board issues instructions to incorporate Clause 4.2 of the Circular dated 18 March 2020 in each order which is appealable to the Appellate Tribunal constituted under Section 109 of the Act. This would guide the aggrieved parties as to the future course of conduct and reduce needless litigation in the form of filing writ petitions such as the present ones.”