Composition of GSTAT is Unconstitutional, rules Madras High Court [Read Judgment]

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The Madras High Court has ruled that the constitution of GST Appellate Tribunal ( GSTAT ) is unconstitutional.

The division bench comprising of Justice S. Manikumar and Justice Subramonium Prasad has held that the number of judicial members must exceed the number of technical members.

However, dismissing an argument made during the course of hearing, it also concluded that advocates do not have a fundamental right to become judges / judicial members of the GSTAT.

While hearing a petition challenging the constitution of the Appellate Tribunal ( GSTAT ) under the Goods and Services Tax (GST) regime, noted that the provisions of Sections 109 and 110 of the Central Goods and Services Tax (CGST) Act 2017 are prima facie contrary to the Apex Court’s decision in Union of India vs. R.Gandhi.

A petition filed by Advocate V Vasanthakumar has contended that Sections 109 and 110 of the Central Goods and Services Tax (CGST) Act 2017 are unconstitutional as the same is void, defective and unconstitutional, being violative of doctrines of separation of powers and independence of the judiciary.

The provisions are relating to the constitution of the AT and qualification, appointment and condition of services of its member. As per the petitioner, “…during the pre-GST regime, taxes were levied under separate laws namely Central Excise, Custom and Service tax had also the scheme of the second appeal before the Appellate Tribunal known as Custom, Excise & Service Tax Appellate Tribunal (‘CESTAT’). Each bench of CESTAT consisted of two members, one Judicial Member and one Technical Member. “GST law provides for the constitution of Appellate Tribunal.

The Appellate Tribunal is constituted under Section 109 of the CGST Act and Tamil Nadu GST Act and Section 110 of the CGST / TNGST Act, provides for qualification appointment, condition of services, etc., for President and members of the Appellate Tribunal.

According to the petitioner, the provision is contrary to the decision of the Supreme Court in Union of India v R. Gandhi wherein it was categorically enunciated that Bench of National Company Law Tribunal / National Company Law Appellate Tribunal should consist of one Judicial Member and one Technical Member or the Judicial Member should be equal or in majority in compare to the Technical Member and in no circumstances the number of Technical Member should be in majority compared to Judicial Members.

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