In 2017, when The Central Goods and Services Tax Act created a GST Tribunal, many felt that the Tribunal’s composition and structure were different from the rules and principles laid by the Supreme Court.
When Madras High Court deemed this Tribunal unconstitutional in its Revenue Bar Association v Union of India in 2019, the Union of India only filed an appeal for a short time. According to some, the reason could have been that the Statutory Provisions were patented unconstitutionally.
As a result, there has been no GST Tribunal for the last five years.
To know why this GST Tribunal is being scrutinized, it is essential to know about it.
GST Tribunal is the forum for the second appeal in GST laws and is the first standard form of dispute resolution between Centre and State Governments. These tribunals are part of the justice delivery and are created as specialized for reducing courts’ workloads.
So what is the reason behind this Tribunal being so unpopular?
It is because it disqualifies lawyers from becoming judicial members when such exclusion is considered impermissible even in the context of consumer form, unlike every other Tribunal. It has been stated that there is no reason to exclude the lawyers from being excluded from such an Indian tribunal. It has been argued that selecting someone with no experience in tax cases and not a lawyer who has practiced tax cases all their career is not logical.
Another reason for the unpopularity is related to the term limit of lawyers in this Tribunal.
In 1985, Supreme Court decided that the number of tribunals would have a minimum tenure of 5 years, with an automatic renewal for another term if there is no compelling evidence to discontinue their service. But when the new GST tribunal came into effect, it introduced a term of 3 years without giving any heed to the Supreme Court directions. When people held this amendment unconstitutional, it was rectified, and the term limit was extended to 4 years, with the provision for renewal for an additional 2 years. All this was in strict contradiction to the decision by the Supreme Court, whose direction this Tribunal has refused to accept.
Yet another reason contributing to this Tribunal’s unpopularity is the number of technical members in both the Centre and State.
This Tribunal is stated to have 4 member tribunals consisting of 2 judicial and technical members each in both State and Central Government. The point of disagreement is that there is no reason to have one technical member in each branch. The GST laws for both are nearly identical. Instead, having 2 members in each branch would be feasible.
In suggesting how to avoid such problems in the future, it has been recommended that the GST tribunal be formed by a proper bill and referred by a parliament committee. But with present conditions being prone to many challenges, the new GST tribunal would likely take months. Due to this difference, many businesses lack the justice they seek through the Tribunals, and it would be interesting to see where this matter settles in the future.