Veerabhadra Music Centre vs. Assistant Commissioner Of State Tax

Facts

The petitioner, Veerabhadra Music Centre, represented by its proprietor, 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 the non-constitution of the GST Appellate Tribunal as envisaged under Section 109 of the CGST Act, 2017. The petitioner argued that in the absence of a functional tribunal, appeals against orders of GST Appellate Authorities were being filed before the High Court. The Court noted a previous order from the Bombay High Court concerning a similar challenge, 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 constitution of the Tribunal.

Held

The Court held that since the GST Appellate Tribunal, as envisaged under Section 109 of the CGST Act, 2017, has not yet been constituted, the High Court is compelled to entertain writ petitions challenging orders passed by GST Appellate Authorities. The Court acknowledged the undertaking given by the Chairman of the Central Board of Indirect Taxes and Customs that no coercive steps would be taken against assessees pending the Tribunal's constitution. To strike a balance, the Court directed the petitioner 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. Upon this payment, the authorities are restrained from taking any coercive steps for the enforcement of the Assessing Officer's and Appellate Authority's orders until the disposal of the appeal before the Tribunal. The petitioner is permitted to approach the Tribunal within three months from its establishment/functioning. The writ petition is disposed of with these directions.

Key Issues

1. Whether the impugned order 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 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 arguments: The petitioner contended that the non-constitution of the GST Appellate Tribunal renders the appellate authority's order unsustainable and that the High Court should entertain the writ petition due to this procedural lacuna. They relied on the principle that a statutory right of appeal cannot be rendered illusory. Respondents' arguments: The respondents did not explicitly record arguments in the judgment. However, they accepted the fact that the Tribunal has not been constituted. They also acknowledged the undertaking given by the Chairman of the Central Board of Indirect Taxes and Customs regarding no coercive steps.