Facts of the Case

The petitioner, M/s Vardhman Ispat Udyog, was issued a notice dated 09.08.2021 under Section 73(5)/74(5) of the Himachal Pradesh GST Act intimating tax payable. After the petitioner's reply, an order dated 30.08.2022 was passed by the Joint Commissioner of State Taxes and Excise, Central Enforcement Zone, Una, directing deposit of tax, interest and penalty within three weeks. The petitioner's first appeal under Section 107(1) against this order was dismissed on 19.05.2023 by the Commissioner (Appeals). Since the GST Appellate Tribunal required to be constituted under Section 109 of the Act was not yet functional, the petitioner had no forum for a further statutory appeal under Section 112(1), and approached the Himachal Pradesh High Court under Article 227 of the Constitution seeking a direction that the appellate order not be given effect pending constitution of the Tribunal.

Issues Involved

  1. Whether a petition under Article 227 is maintainable to challenge/stay an appellate GST order where the statutory second-appeal forum (the GST Appellate Tribunal) has not been constituted.
  2. What interim protection should be granted to the petitioner pending the Tribunal's constitution.

Petitioner's Arguments

  • The petitioner's senior counsel argued that since a specific provision existed for appeal to the Appellate Tribunal and that Tribunal was yet to be constituted under Section 109, no alternative efficacious remedy was available save the present petition, invoking the Court's Article 227 supervisory jurisdiction over quasi-judicial authorities.
  • Reliance was placed on the Bombay High Court's ruling dated 08.02.2023 in Rochem India Pvt. Ltd. v. Union of India (W.P. No.10883 of 2019 and connected matters), where, on identical facts of Tribunal non-constitution, the Bombay High Court directed that the impugned order not be given effect until two weeks after the appeal-filing period under Clause 4.2 of CBIC Circular dated 18.03.2020 expired.

Respondent's Arguments

  • The Additional Advocate General opposed the petition as not maintainable, since a specific statutory remedy existed under the Act.

Court Order / Findings

  • The Court extracted the full statutory scheme of Sections 107, 109, 112 and 113 of the HP GST Act, and the Bombay High Court's detailed findings in Rochem India — including the CBIC Chairman's affidavit tracing the litigation history behind the Tribunal's non-constitution (the Madras High Court's Revenue Bar Association ruling, the Supreme Court's Rojer Mathews and Madras Bar Association rulings striking down member-appointment rules, and the subsequent Tribunal Reforms Act, 2021) and Circular No.132/2/2020-GST clarifying that the limitation period for filing before the Tribunal runs from the date the Tribunal's President enters office, not from the date of the appellate order.
  • The Court held that since the Appellate Tribunal under Section 109 was yet to be constituted in Himachal Pradesh, and no person can be left remediless, the petitioner was justified in invoking Article 227 supervisory jurisdiction, rejecting the State's maintainability objection.
  • Following Rochem India, the Court allowed the petition, directing that the respondent shall not act in furtherance of the appellate order dated 19.05.2023 until the Appellate Tribunal is constituted, whereafter the petitioner may file its appeal within the limitation period prescribed by the Ministry of Finance's order dated 03.12.2019.

Important Clarification

  • Where the GST Appellate Tribunal remains unconstituted under Section 109, an assessee aggrieved by an appellate order has no effective alternative remedy, and a petition under Article 226/227 challenging enforcement of that order is maintainable — the availability of a paper remedy that cannot actually be invoked does not bar constitutional relief.
  • Per the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 and CBIC Circular No.132/2/2020-GST, the three-month (six-month for Government appeals) limitation period under Section 112(1) runs from the date the Tribunal's President or State President enters office, not from the date of the order under challenge, so appellate orders pending the Tribunal's constitution are typically kept in abeyance rather than enforced.

Sections Involved

  • Section 107, Himachal Pradesh Goods and Services Tax Act, 2017 – first appeal to the Appellate Authority.
  • Section 109, Himachal Pradesh Goods and Services Tax Act, 2017 – constitution of the GST Appellate Tribunal, non-constitution of which drove the petitioner to invoke Article 227.
  • Section 112, Himachal Pradesh Goods and Services Tax Act, 2017 – second appeal to the Appellate Tribunal and its limitation period.
  • Article 227, Constitution of India – supervisory jurisdiction of the High Court over subordinate courts and quasi-judicial authorities, the basis for the petition.

Decision – In Favour of

The decision is in favour of the Assessee — the appellate order was stayed from being given effect until the GST Appellate Tribunal is constituted and the petitioner is able to pursue its statutory appeal.

Case Details

Court: High Court of Himachal Pradesh, Shimla
Case No.: CMPMO No. 447 of 2023
Coram: Justice Sandeep Sharma
Date of Order: 18.08.2023

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