President Of GST Appellate Tribunal Appointed — What's Next For GST Litigation?

Finance Minister Nirmala Sitharaman on Monday appointed Justice (Retd.) Sanjaya Kumar Mishra as the President of the GST Appellate Tribunal, New Delhi.

The GSTAT is an authority that will hear appeals regarding GST issues. It is to have a main office called the Principal Bench in New Delhi and 31 other offices called State Benches in different parts of India. It was established as per the Central Goods and Services Tax Act of 2017, and after almost seven years, a development has come up on that front. 

However, the question remains: What happens to the ongoing High Court litigation on GST-related issues?

Currently, there is no GST Appellate Tribunal in operation. Consequently, cases previously decided by the Commissioner (Appeals) are on hold until the Tribunal is established. 

In the absence of the Tribunal, some taxpayers have resorted to filing writ petitions with their respective high courts.

There are two reasons for which taxpayers have approached the high court, as per Abhishek A. Rastogi, founder of Rastogi Chambers. 

If they have approached the High Court to challenge the validity of a provision, the bench may continue hearing the case. However, if they approached the court due to the absence of an appellate authority, the court would ask them to file fresh cases before the GSTAT," explained Rastogi, drawing from his experience of having argued over 500 GST writs.

To make things clearer, the Bombay High Court made a decision in 2023, following a government order from 2020. The court said that because the appeal authority hasn't been set up yet, people can appeal to the Tribunal within three months of receiving the order they want to appeal against or within three months of the Tribunal's President taking office, whichever happens later.

Another question that arises is what legal precedents or jurisprudence the appellate authority would rely upon, given that specific jurisprudence related to GST matters is not readily available before it becomes operational.

During this period, the legal framework for resolving disputes would primarily rely on past judgements and laws pertaining to service tax and excise, according to Parag Mehta, partner at NA Shah Associates LLP.

Additionally, any relevant judgements passed by high courts on GST-related matters would also influence the decision-making process, he said. 

Rastogi further clarified that if the merits of a case have already been determined, that decision stands as final. For instance, if taxability has been established in a specific case, it could serve as a binding precedent for the appellate tribunal. 

However, if a principle has not been established in a case, it falls upon the GSTAT to make the decision, he said. 

Once the GST Appellate Tribunal is established, both taxpayers and the department can file online appeals with the Tribunal to pursue further litigation.