GST update No 320 on no statutory remedy available due to non-establishment of GST Tribunal

The privilege of filing appeal against the orders passed by adjudicating authorities lies with both the revenue authorities and taxpayers. However, under the GST regime, the appellate mechanism is operation only upto the first appellate stage being the Commissioner Appeals as the GST Appellate Tribunal has not been constituted till date.The non-constitution of GST Appellate Tribunal is the root cause of High Courts being flooded with petitions related to various issues including cancellation of GST registration by the revenue authorities. Recently one such case on the same subject matter was reported before TELANGANA HIGH COURTin the case of M/S YAGHNESHWAR LOGISTICS. The decision imparted in this case is the subject matter of discussion of our present update.The petitioner is a proprietorship concern engaged in courier agency serviceand registered under the GST Act, 2017. On 02.09.2021, show cause notice was issued cancelling the GST registration on grounds of non-filing of return for a continuous period of 6 months. The reply was submitted by the petitioner as on 03.10.2021 explaining the circumstances due to which return was not filed by the petitioner. However, order cancelling the registration was passed as on 05.10.2021. Therefore, an appeal was preferred under Section 107 of CGST Act, 2017 which was also subsequently rejected as being time barred. Reliance in this case was drawn on decision of this Court in the case of M/S CHENNA KRISHNAMA CHARYULU KARAMPUDI V/S ADDITIONAL COMMISSIONER (APPEALS-1)wherein it was stated that the action taken by revenue authorities adversely affects the petitioner and further, the non-constitution of GST Tribunals had left the petitioner remedy-less. It was therefore, decided by the Court to set aside the GST cancellation of registration order passed by the revenue authorities in light of the case referred to by the petitioner. Therefore, the present case was remanded back to the respondent and it was directed to consider the grievance of the petitioner regarding cancelling of GST registration and thereafter pass appropriate orders. It was further ordered the petitioner to submit the pending returns as per statue.

The above decision puts a spotlight on the importance of constitution of GST Tribunals at the earliest by the Government failing which the assessees will be left handicapped. Although the GST Council has come up with an idea of setting up GST Tribunal in its 47th GST Council meeting, but no further actions are taken in this respect till date. There had been various cases on similar subject matter wherein statutory right of appeal available to the assessees were deprived due to non-constitution of GST Tribunals. Reference may be made to the decision given by the hon’ble Patna High Court in the case of MANOKAMNA V/S UNION OF INDIA. The matter as regards to constitution of GST Tribunal should be paid attention to at the earliest so that assesses are not deprived of their basic statutory right of appeal.

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GST update No 320 on no statutory remedy available due to non-establishment of GST Tribunal

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