GST Appeal Cannot be Filed Due to Non-Functional Tribunal: Chhattisgarh HC directs to File Appeal Once President Takes Charge [Read Order]

The Chhattisgarh High Court ruled that a taxpayer cannot be left without remedy just because the GST ( Goods and Services tax ) Appellate Tribunal is not operating. As a result, the taxpayer is allowed to file a statutory appeal when the Tribunal's President or State President takes over.

In M/s Simran Construction case, the petitioner challenged an appellate order passed under Section 107 of the Chhattisgarh GST Act, 2017, relating to denial of transitional credit and consequent demand.

While the GST Act provides a second appeal before the GST Appellate Tribunal under Section 112, the petitioner contended that such appeal could not be filed as the Tribunal, though notified in the State, was not operational due to non-appointment of the President and Members.

The petitioner noted earlier judgments of the Chhattisgarh High Court and its coordinate benches, where similar reliefs had been granted in view of the non-functioning of the Tribunal.

It was further pointed out that the Central Board of Indirect Taxes and Customs (CBIC) had issued Order No. 09/2019-Central Tax dated 03.12.2019, clarifying that where the Appellate Tribunal is not constituted, the limitation period for filing appeal under Section 112 would commence from the date on which the President or State President of the Tribunal enters office.

The petitioner also referred to subsequent notifications and circulars issued by the Ministry of Finance extending timelines and addressing procedural difficulties.

The State did not oppose the petitioner’s request, acknowledging that the Tribunal was yet to become functional in Chhattisgarh.

The Court ruled that administrative delays in the Tribunal's formation cannot deprive taxpayers of their statutory right of appeal after taking into account the statutory regulations, CBIC explanations, Center notices, and binding precedents of the High Court.

The Court observed that forcing assessees to pursue writ remedies repeatedly would defeat the legislative intent behind establishing a specialised appellate forum under the GST.

Accordingly, the High Court directed the petitioner to file a statutory appeal under Section112 of the CGST Act after making the prescribed statutory pre-deposit as soon as the President or State President of the GST Appellate Tribunal takes charge.

The Court further directed that once such an appeal is filed, the Tribunal shall decide it strictly in accordance with law and on its own merits.

Justice Naresh Kumar Chandravanshi clarified that the statutory stay under Section 112(9) would continue to operate till the disposal of the appeal, protecting the petitioner from coercive recovery proceedings during this interregnum.

However, the Court also said that if the appeal is not filed within the prescribed limitation period after the Tribunal becomes functional, or if the required statutory deposit is not made, the State would be free to initiate recovery proceedings in accordance with law.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates