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(2023) 3 Centax 269 (Bom.) [08-02-2023]

(2023) 3 Centax 269 (Bom.)

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Nitin Jamdar and Abhay Ahuja, JJ.
GULF OIL LUBRICANTS INDIA LTD.
Versus
JOINT COMMISSIONER OF STATE TAX (APPEAL-V)
Writ Petition Nos. 3097, 3092, 3096, 3517 and 3789 of 2022, decided on 8-2-2023

GST : Where GST tribunal was not yet constituted and hence,
writ petition was filed against appellate order assessee
should make declaration under clause 5 of Circular No. JC
(HQ)-1/GST/2020/Appeal/ADM-8 stating that an appeal
would be filed so that recovery proceedings were not initiated

Appellate Tribunal - Writ Petition - Non-establishment of Appellate Tribunal - Petitioner

filed appeal before Appellate Authority but same were dismissed - Though statute provides
for an appeal before Appellate Tribunal under Section 112 but appellate tribunal is not
constituted - Petitioners filed instant writ petitions as recovery proceedings were to be
initiated - HELD: As per clause 5 of Circular No. JC (HQ)-1/GST/2020/Appeal/ADM-8 dated
26 May 2020 a declaration in Annexure-I has to be filed before jurisdictional tax officer
stating that an appeal is proposed to be filed and If such declaration is not filed, then it
would be presumed that taxpayer is not willing to file an appeal and recovery proceedings
would be initiated - In Instant case, if petitioners had not filed declarations, petitioner
would submit same within 15 days - Further , If recovery had already been undertaken, 15
days period was to be given to make such a declaration [Section 109 read with section 110
and section 112 of Central Goods and Services Tax Act,2017/Maharashtra Goods and
Services Tax Act,2017] [paras 7,8 and 10]
In favour of assessee
CIRCULAR AND NOTIFICATIONS
Circular No. JC (HQ)-1/GST/2020/Appeal/ADM-8 dated 26 May 2020

Represented by : Mr. Ishan Patkar with Ms. Chaitali Raul i/b Alaksha Legal for the Petitioner.
Ms. Jyoti Chavan, Mr. Himanshu Takke, Mr. Manish Upadhyay, AGP's for the Respondent.

[Judgement per : Nitin Jamdar, J]. - Rule. Rule made returnable forthwith. Taken up for
disposal.
2. In these Petitions, the Petitioners have challenged the Order-in-Appeal passed by the State Tax
Authorities. The Petitioners have received show cause notices, which were adjudicated and Order-in-
Original was passed. The Petitioners have filed appeals before the Appellate Authority and the appeals
were dismissed.
3. The Petitioners have filed these Writ Petitions invoking Article 226 of the Constitution of India
on the ground that though the statute provides an appeal to a Appellate Tribunal under section 112 of
the State Good and Services Tax Act ("State GST Act"), the Appellate Tribunal is not constituted. A
challenge is also raised to the validity of statutory provisions.
4. The relevant Sections 109, 110 and 112 of the Maharashtra Goods & Services Tax Act provide
as under:-
"109. (1) Subject to the provisions of this Chapter, the Goods and Services Tax Tribunal
constituted under the Central Goods and Services Tax Act shall be the Appellate Tribunal for
hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority
 under this Act.
(2) The constitution and jurisdiction of the State Bench and the Area Benches located in the State
shall be in accordance with the provisions of section 109 of the Central Goods and Services Tax
Act or the rules made thereunder.
** ** **

110. The qualifications, appointment, salary and allowances, terms of office, resignation and
removal of the President and Members of the State Bench and Area Benches shall be in
accordance with the provisions of section 110 of the Central Goods and Services Tax Act.
** ** **

112. (1) Any person aggrieved by an order passed against him under section 107 or section 108
of this Act or the Central Goods and Services Tax Act may appeal to the Appellate Tribunal
against such order within three months from the date on which the order sought to be appealed
against is communicated to the person preferring the appeal.
(2) 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 fifty thousand rupees.
(3) The Commissioner may, on his own motion, or upon request from the Commissioner of
central tax, call for and examine the record of any order passed by the Appellate Authority or the
Revisional Authority under this Act or under the Central Goods and Services Tax Act for the
purpose of satisfying himself as to the legality or propriety of the said order and may, by order,
direct any officer subordinate to him to apply to the Appellate Tribunal within six 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.
(4) Where in pursuance of an order under sub-section (3) the authorised 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 under sub-section (11) of section 107 or under
sub-section (1) of section 108 and the provisions of this Act shall apply to such application, as
they apply in relation to appeals filed under sub-section (1).
(5) 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 forty-five days of the receipt of notice, a
memorandum of cross-objections, verified in the prescribed manner, against any part of the
order appealed against and such memorandum shall be disposed of by the Appellate Tribunal, as
if it were an appeal presented within the time specified in sub-section (1).
(6) The Appellate Tribunal may admit an appeal within three months after the expiry of the
period referred to in sub-section (1), or permit the filing of a memorandum of cross-objections
within forty-five days after the expiry of the period referred to in sub-section (5), if it is satisfied
that there was sufficient cause for not presenting it within that period.
(7) An appeal to the Appellate Tribunal shall be in such form, verified in such manner and shall be
accompanied by such fee, as may be prescribed. (8) No appeal shall be filed under sub-section
(1), unless the appellant has paid-- (a) 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 ( b) a sum equal to
twenty per cent. of the remaining amount of tax in dispute, in addition to the amount paid under
sub-section (6) of the section 107, arising from the said order, in relation to which the appeal has
been filed.
(9) Where the appellant has paid the amount as per sub-section (8), the recovery proceedings for
the balance amount shall be deemed to be stayed till the disposal of the appeal.
(10) Every application made before the Appellate Tribunal, —
(a) in an appeal for rectification of error or for any other purpose ; or
(b) for restoration of an appeal or an application, shall be accompanied by such fees as
may be prescribed."

** ** **

5. Learned Assistant Government Pleader has placed on record a Circular No. JC (HQ)-
1/GST/2020/Appeal/ADM-8 dated 26 May 2020 issued by the office of Commissioner of State Tax,
Maharashtra State, giving clarification in respect of non-constitution of Appellate Tribunal. The Circular
refers to various representations received since the Appellate Tribunal is not constituted and
thereafter refers to the procedure to be adopted. The Circular states as under:-
" 4.3 Hence, as of now, the prescribed time limit to make application to appellate tribunal will be
counted from the date on which President or the State President enters office. The appellate
authority while passing order may mention in the preamble that appeal may be made to the
appellate tribunal whenever it is constituted within three months from the President or the State
President enters office. Accordingly, it is advised that the appellate authorities may dispose all
pending appeals expeditiously without waiting for the constitution of the appellate tribunal.
5. Recovery of dues after disposal of appeal.
After disposal of pending appeal u/s 107, if any demand is confirmed or appellate authority has
created the additional demand then in such cases tax payer shall submit a declaration in
Annexure-I before the jurisdictional tax officer stating that he is proposing to file an appeal u/s
112(1) against the appeal order. If such declaration is not submitted within fifteen days from the
communication of the said order, then it will be presumed that tax payer is not willing to file
appeal against the order and recovery proceedings may be initiated as per the provisions of law.
6. This Trade Circular is clarificatory in nature and cannot be made use of for interpretation of
provisions of the law. Difficulty if any, in the implementation of this Circular may be brought to
the notice of the office of the Commissioner of State Tax, Maharashtra."
(emphasis supplied)
An identical Circular extending the period of limitation to file an appeal to the GST tribunal, with
some modifications, has been issued by the Central Authorities.
6. Therefore, as clarified in the Circular dated 26 May 2020, the time to file appeals/application to
the Appellate Tribunal would be counted from the date the President or the State President enters the
office.
7. A large number of petitions are being filed in this Court on the ground that the GST Tribunal is
not functional. Almost in all cases, protective orders are being passed. It is stated in clause 5 of the
Circular as above that a declaration in Annexure-I has to be filed before the jurisdictional tax officer
stating that an appeal is proposed to be filed. If such declaration is not filed, then it would be
presumed that taxpayer is not willing to file an appeal and recovery proceedings would be initiated.
Therefore, the sequitur is that if such a declaration is filed, recovery proceedings will not be initiated
until the prescribed time limit as specified in clause 4.3 of the Circular. Therefore, as of today there is
no prejudice to the Petitioners or any similarly situated taxpayers on the ground of the non-availability
of the State GST Tribunal.
8. Reverting to the present Petitions, the Petitioners have already filed such a declaration under
clause 4.3 of the Circular. If the Petitioners have not filed declarations, we permit the Petitioners to
submit the same within 15 days from today. Since the Petitioners have raised various other
challenges, such a declaration would be considered as without prejudice. As and when the
contingency in the clause 4.3 of the Circular dated 26 May 2020 occurs, the petitioners can file an
appeal or writ petition as the case may be. In light of this position, we do not deem it necessary to
keep these Petitions pending on the file of this court.
9. Clarifying that the prescribed time limit has been extended as per clause 4.3 and protective
orders are a incorporated in clause 5 of the Circular, we dispose of the writ petitions.
10. Respondent State will consider two measures to reduce the inflow of writ petitions in this
Court due to non-constitution of the GST Tribunal. First, to incorporate a stipulation contained in
clause 4.3 and clause 5 of the Trade Circular dated 26 May 2020 in the order passed by the First
Appellate Authority. This will put the tax payer to notice that the time limit for filing the appeal is
extended and if a declaration is filed in terms of Annexure-I within the stipulated period, the
protective measure would automatically come into force. Second, if recovery is being undertaken in
terms of clause 5 for failure to file a declaration within the time limit, by way of indulgence, to give 15
days period to make such a declaration. These two measures, according to us, will substantially
reduce the litigation which has arisen due to the non-constitution of the GST Tribunal.
11. Learned AGP states that these suggestions will be placed before the State Commissioner of
State Tax for taking necessary steps.
12. Keeping all contentions of the parties open, we dispose of the Writ Petitions as above.
_______