The Kerala High Court, in a recent order, decided a writ petition challenging GST order on merits under Article 226 of the Constitution considering the fact that the GST Tribunal is not constituted till date and the fact that the period of limitation will start to run only from the date of the constitution of the Appellate Tribunal is no solace to the petitioner.
The petitioner is a non-banking finance company. the GST department held that the petitioner is liable to pay tax on notice pay received from the former employees of the petitioner.
On appeal, the appellate authority upheld the orders of the original authority, which had rejected the claim for refund made by the petitioner for a refund of GST paid on notice pay received from the erstwhile employees.
The department contended that the writ petition is not maintainable before this Court merely because the GST Appellate Tribunal has not been constituted. It is submitted that the Central Goods and Service Tax (Ninth Removal of Difficulties) Order, 2019, clarifies that the starting point of limitation for the purposes of filing any appeal against any order before the GST Appellate Tribunal shall count only from the date of the constitution of the tribunal.
The department further contended that the order impugned is upholding the decision of the original authority to reject the claim for refund and therefore, the petitioner can very well wait for the constitution of the appellate tribunal for adjudication of its grievances, as there is no demand against the petitioner.
Holding in favour of the petitioner, Justice Gopinath P held that the amount of money received by the petitioner as notice pay from erstwhile employees is not a taxable transaction for the purposes of the GST laws.
Rejecting the contentions of the department, the Court further held that “the contention raised by the learned counsel for the respondent Department that the petitioner has an effective alternative remedy before the GST Appellate Tribunal does not appeal to this Court for the simple reason that the GST Appellate Tribunal is yet to be constituted. The fact that the period of limitation will start to run only from the date of the constitution of the Appellate Tribunal is no solace to the petitioner. The petitioner is, therefore, entitled to exercise the jurisdiction of this Court under Article 226 of the Constitution of India to challenge the orders impugned in this writ petition.”
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