In W.P. No.3097 of 2022-BOM HC- Bombay HC suggests measures to reduce inflow of writ petitions due to non-constitution of GST Tribunal
Justices Nitin Jamdar & Abhay Ahuja [08-02-2023]

Read Order: Gulf Oil Lubricants India Ltd. and Ors v. Joint Commissioner of State Tax Appeal-V and Ors 

Tulip Kanth

Mumbai, March 3, 2023: Considering the non-constitution of the GST Tribunal, the Bombay High Court has asked the State Govt to incorporate a stipulation contained in Clause 4.3 and Clause 5 of the Trade Circular dated May 26, 2020 notifying that the time limit for filing the appeal is extended and if a declaration is filed in terms of Annexure-I within the stipulated period, the protective measure would automatically come into force. 

Secondly, the Division Bench of Justice Nitin Jamdar and Justice Abhay Ahuja also clarified that if recovery is being undertaken in terms of Clause 5 for failure to file a declaration within the time limit, by way of indulgence, then to give 15 days period to make such a declaration.

These two measures would substantially reduce the litigation which has arisen due to the non-constitution of the GST Tribunal, the Bench further added.

The Petitioners had challenged the Order In-Appeal passed by the State Tax Authorities. 

The Assistant Government Pleader had placed on record a Circular No. JC (HQ)-1/GST/2020/Appeal/ADM-8 dated May 26, 2020 issued by the office of Commissioner of State Tax, Maharashtra State, giving clarification in respect of non-constitution of Appellate Tribunal. The Circular referred to various representations received since the Appellate Tribunal has not been constituted and thereafter referred to the procedure to be adopted. 

The Bench took note of the fact that in the Circular dated May 26, 2020, the time to file appeals/application to the Appellate Tribunal would be counted from the date the President or the State President enters the office.

It was also noticed that a  large number of petitions were being filed in this Court on the ground that the GST Tribunal was not functional. Almost in all cases, protective orders were being passed.

Clause 5 of the Circular puts forth  that a declaration in Annexure-I has to be filed before the jurisdictional tax officer stating that an appeal is proposed to be filed. If such declaration is not filed, then it would be presumed that taxpayer is not willing to file an appeal and recovery proceedings would be initiated.

Reverting to the present Petitions, the Petitioners had already filed such a declaration under Clause 4.3 of the Circular. 

“If the Petitioners have not filed declarations, we permit the Petitioners to submit the same within 15 days from today. Since the Petitioners have raised various other challenges, such a declaration would be considered as without prejudice”, the Bench held while also clarifying that as and when the contingency in the clause 4.3 of the Circular occurs, the petitioners can file an appeal or writ petition as the case may be. 

The Bench disposed of the writ petitions after clarifying that the prescribed time limit has been extended as per Clause 4.3 and protective orders are incorporated in Clause 5 of the Circular.

The Bench, thus, concluded the matter by saying, “ Respondent State will consider two measures to reduce the inflow of writ petitions in this Court due to non-constitution of the GST Tribunal. First, to incorporate a stipulation contained in Clause 4.3 and Clause 5 of the Trade Circular dated 26 May 2020 in the order passed by the First Appellate Authority. This will put the tax payer to notice that the time limit for filing the appeal is extended and if a declaration is filed in terms of Annexure-I within the stipulated period, the protective measure would automatically come into force. Second, if recovery is being undertaken in terms of Clause 5 for failure to file a declaration within the time limit, by way of indulgence, to give 15 days period to make such a declaration.”