M/S. Meenakshi Fertilizers Depot vs. Superintendent (CT)

Facts

The petitioner, M/s. Meenakshi Fertilizers Depot, filed a writ petition challenging an Order-in-Appeal dated August 4, 2023, for the tax period July 2017 to March 2020. The challenge was primarily based on the non-constitution of the GST Appellate Tribunal as envisaged under Section 109 of the Central Goods and Services Tax Act, 2017. The petitioner sought to quash the impugned order, arguing it was illegal and contrary to the concept of Revenue Neutrality. The petitioner also sought a stay on further proceedings pursuant to the impugned order. The respondents included various GST authorities and the State of Telangana and Union of India.

Held

The Court acknowledged that the GST Appellate Tribunal, as envisaged under Section 109 of the CGST Act, 2017, had not been constituted even in 2024. In the absence of a functional Tribunal, the High Court was compelled to entertain writ petitions challenging orders passed by GST Appellate Authorities. The Court noted the undertaking given by the Chairman of the CBIC that no coercive steps would be taken against assessees pending the constitution of the Tribunal. Consequently, the Court directed the petitioner to approach the Tribunal within three months from its establishment. As an interim measure, the petitioner was directed to pay 20% of the tax liability as assessed by the Assessing Officer, in terms of Section 112 of the Act, 2017, within four weeks. The authorities were restrained from taking coercive steps for the enforcement of the order of the Assessing Officer and the Appellate Authority until the disposal of the appeal. The payment was to be made via Form GST DRC-03, clearly indicating it was a part deposit against the challenged order and the intention to approach the Tribunal.

Key Issues

1. Whether the impugned Order-in-Appeal dated 04.08.2023, passed by the Additional Commissioner (Appeals-II), is illegal and contrary to the law laid down by the Hon'ble Courts on the concept of Revenue Neutrality, given the non-constitution of the GST Appellate Tribunal under Section 109 of the CGST Act, 2017? Petitioner's Contention: The petitioner argued that the impugned order is illegal due to the non-constitution of the GST Appellate Tribunal. They relied on the undertaking given by the Chairman of the Central Board of Indirect Taxes and Customs (CBIC) in a batch of writ petitions before the Bombay High Court, wherein it was stated that no coercive steps would be taken against assessees pending the constitution and functioning of the Tribunal. The petitioner sought to quash the order on the grounds of Revenue Neutrality. Respondents' Contention: The respondents, represented by various counsel including Senior Standing Counsel for CBIC and Special Government Pleader for the State, accepted the fact that the Tribunal had not been constituted. They acknowledged the undertaking given by the Chairman of the CBIC.