Agi Green Pac LTD vs. The Joint Commissioner Of Central Tax (Appeals- Ii)

Facts

The petitioner, AGI Greenpac Ltd, filed a writ petition challenging an Order-in-Appeal dated October 30, 2023, passed by the Joint Commissioner of Central Tax (Appeals-II). The petitioner sought to set aside this order and declare that they are not liable to pay any tax, interest, or penalty. The primary ground for the challenge was the non-constitution of the GST Appellate Tribunal as envisaged under Section 109 of the Central Goods and Services Tax Act, 2017. The petitioner also sought a stay on the recovery of tax amounting to INR 6,76,016/-, interest, and penalty of Rs. 6,76,016/-. The respondents included various GST authorities and the State of Telangana and the 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. The Court noted the undertaking given by the Chairman of the Central Board of Indirect Taxes and Customs in a Bombay High Court case, which assured that no coercive steps would be taken against assessees pending the Tribunal's establishment. The Court found that in the absence of a functional Tribunal, it was compelled to entertain writ petitions challenging orders passed by GST Appellate Authorities. The Court decided that it would be more appropriate to dispose of the writ petition by permitting the petitioner to approach the Tribunal within three months of its establishment. As an interim measure, to strike a balance, 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 until the disposal of the appeal by the Tribunal. The payment was to be made via Form GST DRC-03, clearly indicating it was a part deposit against the challenged order and an intention to approach the Tribunal.

Key Issues

1. Whether the non-constitution of the GST Appellate Tribunal under Section 109 of the Central Goods and Services Tax Act, 2017, renders the impugned Order-in-Appeal illegal and arbitrary, violating principles of natural justice? (Question of law) 2. Whether the petitioner is liable to pay any amount, interest, or penalty in light of the non-functional GST Appellate Tribunal? (Question of mixed law and fact) Petitioner's Arguments: The petitioner argued that the non-constitution of the GST Appellate Tribunal makes the impugned order illegal and arbitrary, violating principles of natural justice. They contended that in the absence of a functional tribunal, challenges to appellate orders must be entertained by the High Court through writ petitions. They also sought a declaration that they are not liable to pay the demanded amounts. Revenue's Arguments: The revenue, through its counsel, referred to an undertaking filed by the Chairman of the Central Board of Indirect Taxes and Customs in a previous case before the Bombay High Court (W.P. No. 10883 of 2019 and Batch). This undertaking stated that no coercive steps would be taken against assessees pending the constitution of the Tribunal. The revenue submitted that this undertaking still holds good.