Even as the GST Tribunal has not yet started functioning and petitioners have been approaching courts for appeals, the Bombay High Court has given an order to reduce writ petitions in courts and fear of recoveries in the absence of the tribunal. It said that as the GST Tribunal is not formed yet, the assessee may file a declaration of their intent to appeal against the order of authorities and no recovery should be initiated once the declaration is put on record.
The GST Council at its meeting last month approved the creation of the GST Tribunal with its benches across states. The tribunal is expected to start functioning in 6-10 months. Once set up, the Goods and Services Tax Appellate Tribunal (GSTAT) will ensure that businesses can approach the Tribunal instead of the high court for many matters.
Sanjeev Sachdeva, partner at Luthra and Luthra Law Offices India, said that in the absence of the GST Tribunal, assessees facing orders of demand issued by the lower authorities have been forced to approach high courts (HCs) in writ jurisdiction.
He said, “While some writ petitions have been entertained on the ground that there is no efficacious alternative available to the assessees, this has undoubtedly added to the burden of both the Courts as well as that of assessees.”
He, however, said the CBIC and state GST authorities have already issued circulars providing two interim reliefs for assessees — (1) Time period for filing appeal to the GST Tribunal will start from the day that the Tribunal starts functioning effectively; and (2) A simple declaration by the assessee that she proposes to file an appeal against an order of demand before the Tribunal would keep recovery action pending against her.
Sachdeva said that in view of these circulars, the Bombay HC has held that the writ need not be allowed as the assessee is not prejudiced against, and will get efficacious statutory remedy soon when the Tribunal starts functioning.
Abhishek Jain, partner (indirect tax) at KPMG in India, said, “This is a welcome order by the high court to reduce writ petitions and also fear of recoveries in the absence of the Tribunal.”
The Bombay High Court in its order also said that in case assessee has failed to file such declaration within stipulated time and officers wish to initiate any recovery proceedings, they must give a 15-day period to file such declaration.
KPMG’s Jain also said, “This order by the Bombay HC will help streamline the process flow and help avoid disputes between the taxpayers and the department till the time the GST Tribunal is set up. Similar guidelines may be considered to be issued for PAN India level by the Government to reduce confusion in the interim period.”
The GoM on GST Tribunal was set up in July under the chairmanship of Haryana Deputy Chief Minister Dushyant Chautala.
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