PIL in Gujarat HC challenges Authority of Advance Ruling under GST: Issues Notice to Centre [Read Petition]

under-Construction Project - GST - Advance Ruling Authority

The Gujarat High Court, recently admitted a petition challenging the constitutional validity of the provisions relating to the Authority of Advance Ruling (AAR) and the Appellate Authority of Advance Ruling (AAAR) under the Central Goods and Services for being coram non judice as it has no judicial member on it.

Admitting the petition for hearing, the High Court has issued notice to the Centre, the GST Council and the Government of Gujarat on a petition moved by Nipun Praveen Singhvi wherein he said before the pre-GST regime, the Authority of Advance Ruling was headed by a judicial member, but after GST, the government has “eliminated” judicial member from AAR and AAAR.

The petitioner is a Tax Practitioner. The counsel for the petitioner, Vishal J Dave submitted before the Court that under the old regime, the AAR was headed by a judicial member who was a retired Supreme Court judge. However, under the GST law, Judicial Members have been eliminated from the constitution of the AAR and AAAR, which provide for tax liability in advance besides clarifications on tax provisions. According to them, the legislation under the GST Act, the decision of AAR and AAAR is binding on the applicant and therefore, the advance ruling body is acting in a judicial capacity.

“Therefore, the authority is a body exercising judicial power and is a Tribunal within the meaning of the expression in articles 136 and 227 of the Constitution. However, as there is total absence of a judicial member in the constitution of AAR and AAAR, it is coram non judice,” the petition reads.

The constitution of AAR under the Gujarat Goods and Services Act has also been challenged in the petition.

Since the Government of Gujarat has already constituted the coram for the Gujarat Authority for Advance Ruling and the appellate authority, the petitioner urged that till the pendency of the petition, the same be directed to not pass any order.

The petitioner said he has moved court against the “tribunalisation and bureaucratisationof justice and its impact on judicial independence and separation of powers.”
“Legal proceeding before the AAR and AAAR is outside the presence of a judge (without a judge), with improper venue, or without jurisdiction, therefore, any adjudication and judgment passed by the AAR and AAAR which has no authority to adjudicate under the Act is clearly in violation of the Article14 and 50 of the Constitution of India and would be coram non judice and nullity,” the petition reads.

“In terms of section 96 of the CGST and SGST Act, the Parliament has abdicated its authority by empowering the Central Government and the state Government to frame Rules which amounts to delegation of essential functions and granting of uncanonised power to the executive to control vital bodies that perform, in essence, judicial functions,” it added.

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