Sai Veerabhadra Electronics vs. Assistant Commissioner Of State Tax

Facts

The petitioner, Sai Veerabhadra Electronics, filed a writ petition before the Telangana High Court challenging an order dated January 31, 2024, passed by the Appellate Joint Commissioner of State Tax (Respondent No. 2). The primary ground for the challenge was that the GST Appellate Tribunal, as envisioned under Section 109 of the CGST Act, 2017, had not yet been constituted. The Court noted that this issue had been addressed by the Bombay High Court in a batch of writ petitions, where the Chairman of the Central Board of Indirect Taxes and Customs had provided an undertaking not to take coercive steps against assessees pending the Tribunal's constitution. The Telangana High Court acknowledged that the Tribunal remains unconstituted even in 2024, leading to such challenges being filed before it.

Held

The Court held that in the absence of the GST Appellate Tribunal being functional, it is compelled to entertain writ petitions challenging orders passed by GST Appellate Authorities. The Court referred to the undertaking given by the Chairman of the Central Board of Indirect Taxes and Customs before the Bombay High Court, stating that no coercive steps would be taken against assessees pending the Tribunal's constitution. The Court found this undertaking to be still valid. Consequently, the Court directed 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 assessed by the Assessing Officer within four weeks from the date of the order, by filing Form GST DRC-03, clearly mentioning it as a part deposit against the challenge to the order-in-appeal and the intention to approach the Tribunal. 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.

Key Issues

1. Whether the order dated January 31, 2024, passed by the Appellate Joint Commissioner of State Tax is void, illegal, arbitrary, and violative of Articles 14, 19, and 21 of the Constitution of India, and the principles of natural justice, due to the non-constitution of the GST Appellate Tribunal as mandated by Section 109 of the CGST Act, 2017? Petitioner's Contention: The petitioner argued that the impugned order is unsustainable and liable to be set aside because the statutory appellate mechanism, the GST Appellate Tribunal, has not been established, rendering the appellate authority's order subject to challenge before the High Court via a writ petition. They relied on the undertaking given by the Chairman of the CBIC in similar cases before the Bombay High Court. Respondents' Contention: The respondents accepted the fact that the Tribunal has not been constituted. They did not present any argument against the petitioner's reliance on the undertaking given by the Chairman of the CBIC.