Introduction
Recently, it was reported that Justice (Retd.) Sanjaya Kumar Mishra has been appointed as the President of the Goods and Services Tax Appellate Tribunal (GSTAT). The Ministry of Finance, in a press release dated 6th May 2024, described this appointment as the:
“beginning of the operationalization of the GSTAT, a crucial body for resolving GST-related disputes.”
This naturally raises the question:
Does the appointment of the President mean that the GST Appellate Tribunal has become operational from that date?
Before answering that, let us understand the significance of the tribunal’s operationalization.
Why Is the Operationalization of GSTAT Important?
Until now, taxpayers have been unable to file appeals against orders of the First Appellate Authority or Revisional Authority due to the non-constitution of the GST Appellate Tribunal. This resulted in legal limbo for many, as no higher appellate forum existed for them to challenge adverse orders.
To mitigate this situation temporarily, the government issued:
Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 (dated 3rd December 2019), and
Circular No. 132/2/2020–GST (dated 18th March 2020)
These were stop-gap measures to provide clarity in the absence of the GSTAT.
Timeline for Filing Appeals to GSTAT
The relevant portion of Circular 132/2/2020–GST states:
“… the appeal to tribunal can be made within three months (six months in case of appeals by the Government) from the date of communication of order or date on which the President or the State President, as the case may be, of the Appellate Tribunal enters office, whichever is later.”
This provision makes it clear that the three-month appeal window starts only once the President or State President enters office. Therefore, the interpretation of “enters office” becomes crucial in determining whether the tribunal is operational.
Does Appointment Equal Entering Office?
Let’s examine this in light of the law. According to the Ninth Removal of Difficulties Order, 2019:
“… the date on which the President or the State President, as the case may be, of the Appellate Tribunal after its constitution under section 109, enters office.”
This clarifies that the President must enter office only after the constitution of the tribunal. Hence, an appointment alone does not satisfy the requirement.
What Does Section 109 of the CGST Act Say?
The legal foundation for the tribunal’s constitution lies in Section 109 of the CGST Act. Sub-section (1) reads:
“The Government shall, on the recommendations of the Council, by notification, establish with effect from such date as may be specified therein, an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal…”
This implies the following sequence must take place:
The GST Council must recommend the constitution of the tribunal.
The Government must issue a notification, specifying the effective date of establishment.
Only after these steps are completed can the tribunal be said to be constituted. Consequently, only from that date can the President be deemed to have “entered office” under the law.
Clarification from the Finance Act, 2023
It is important to note that Section 109 was substituted by the Finance Act, 2023, although this substituted section is yet to be notified. Under the new provision:
The concept of State President has been removed.
There will only be a President and Vice-President overseeing various benches of the tribunal.
While the present analysis is based on the current legal framework, once the new section is notified, the structure and operational dynamics of GSTAT may further evolve.
Conclusion
While the appointment of Justice (Retd.) Sanjaya Kumar Mishra as President is an important milestone, it does not signify that the GST Appellate Tribunal is operational.
The tribunal will become operational only after:
It is formally constituted via notification in the Official Gazette, following GST Council recommendations.
The appointed President is thereby considered to have entered office.
Only from this point will the three-month window for filing appeals begin. This distinction highlights the need to adhere to proper legal procedures in activating key statutory bodies like the GST Appellate Tribunal.