GST Recovery should stay in absence of GSTAT?

One of the fundamental facets of ‘access to justice’ is that every person within statutory limits must be provided with an adjudicatory mechanism. The absence of Goods and Services Tax Appellate Tribunal (‘GSTAT’) is a negation of fair legal procedure which is implicit in access to justice and explicit in Articles 14 and 21 of the Constitution. It cannot be the most ironic situation that even after 4 years 8 months (1700+ days) every litigant is denied the right of having access to justice.    

The Constitutional Bench of the Hon’ble Supreme Court in Anita Kushwaha v. Pushap Sudan, (2016) 8 SCC 509 has rendered that ‘access to justice’ is a fundamental right. While examining the issue whether access to justice is a fundamental right, the Hon’ble Court held that, ‘access to justice is and has been recognised as a part and parcel of right to life in India and in all civilised societies around the globe. Further, the Hon’ble Supreme Court laid down the four facets that constitute the essence of access to justice interalia ‘the State must provide an effective adjudicatory mechanism’.  

Paragraph 4.2 of the Circular No. 132/2/2020 – GST dated 18.03.2020 states that ‘the appellate tribunal has not been constituted in view of the order by Madras High Court in case of Revenue Bar Assn. v. Union of India’. As the matter is sub-judice and pending before the Hon’ble Supreme Court, in sum and substance, interalia, the main issue is the composition of the bench comprising of two technical members against one judicial member. Why do technical members have to be in majority? Why can’t government accept as it is generally followed, for instance, CESTAT’s composition? Why such sudden changes, which will raise disputes? Is it right to have a judicial member in minority without impacting the independence of the judiciary? Is it nothing but delay tactics? All the questions may be answered by the Hon’ble Supreme Court but in the meanwhile, the inaction of the government is affecting the litigants to have access to justice and defeats the fundamental purpose of the justice delivery system. 

We are not living in a utopia. Hypothetically, in absence of an appellate tribunal, the litigants may be harassed by the lower authorities by citing themselves (adjudicatory and appellate authority) as the ultimate judge for the issues. As the authorities fully understand that even Hon’ble High Court has limited grounds to entertain a Writ Petition against their orders. For instance, the order may revolve around the question of facts and maybe not be entertained as a Writ Petition. And all these grounds may give the lower authorities the reason to demand certain percentage of the disputed amount to pass a favourable order. As we are not in utopia, hypothetically, that may be possible and maybe happening across the country.   

So, what should be the interim solution? There should be no GST recovery against the orders. If the government cannot provide an effective adjudicatory mechanism, then the government should not recover the amount. On the legal side, it is extremely arbitrary. The orders are there creating legal liability to pay but the appellate mechanism exists only on the papers. Can the litigant challenge the orders creating liability to pay? Yes (on paper), But can they challenge it practically? No. The department starts the recovery process and the litigant cannot even challenge those orders. Is it not a mockery of the justice delivery system then what?  

On the other side, Hon’ble High Courts are granting a stay vide pre-deposit of 20% as it is there before the Appellate Tribunal in compliance with the requirement u/s. 112(8). Few cases are there involving question of facts that are not entertained by the Hon’ble High Courts, as these cases don’t satisfy the grounds to invoke the discretionary jurisdiction. However, looking at the present situation even these cases may be entertained and stayed by the Hon’ble High Courts and may be remanded to the Appellate Tribunal after is functioning. Such strong stride and action are required otherwise department may misuse the prevailing condition to burst the bubble of utopia.  

 The author may be reached at*

Facebook Twitter Linkedin
Scroll Up
Copy link
Powered by Social Snap