GST Council Ordered to Expedite Notification of State and Area Benches in UP, Ensuring Appellate Remedies for All.

M/s Torque Pharmaceuticals Pvt. Ltd. And Others Versus Union of India And 5 Others

M/s Torque Pharmaceuticals Pvt. Ltd. And Others Versus Union of India And 5 Others - 2021 (45) G. S. T. L. 321 (All.) , [2023] 109 G S.T.R. 282 (All) Issues Involved:
1. Constitution of the Goods and Services Tax Appellate Tribunal (GSTAT) for the State of Uttar Pradesh.
2. Validity of the proposal for the creation of State and Area Benches of GSTAT.
3. Interpretation of Section 109(6) of the CGST Act and U.P. GST Act.
4. Jurisdiction and authority of the Central and State Governments in constituting GSTAT Benches.
5. Impact of the non-availability of GSTAT on the rights of aggrieved persons.

Issue-wise Detailed Analysis:

1. Constitution of the Goods and Services Tax Appellate Tribunal (GSTAT) for the State of Uttar Pradesh:
The petitioners sought the constitution of a 'Regional Bench' and 'State Bench' for the State of U.P. at the seat of the jurisdictional High Court and such number of 'Area Benches' as recommended by the GST Council. The court noted that the Central Government is mandated under Section 109(6) of the CGST Act to specify a State Bench of the Appellate Tribunal and that the State Government can request the creation of Area Benches, which the Central Government may constitute based on the Council's recommendation.

2. Validity of the Proposal for the Creation of State and Area Benches of GSTAT:
The court examined the proposals sent by the State Government on 05.03.2019 and 15.03.2019, recommending the creation of a State Bench at Allahabad and four Area Benches at Ghaziabad, Lucknow, Agra, and Varanasi. These proposals were initially approved by the GST Council in its 39th meeting on 14.03.2020. However, a subsequent proposal dated 29.05.2020 by the Commissioner of Commercial Tax, U.P., recommending a State Bench at Lucknow and three Area Benches, was found to be in contradiction to the earlier proposals and was quashed by the court.

3. Interpretation of Section 109(6) of the CGST Act and U.P. GST Act:
The court emphasized that Section 109(6) of the CGST Act mandates the Central Government to specify a State Bench for each State or Union Territory. The State Government's role is limited to requesting the creation of Area Benches. The court held that the Central Government must act on the GST Council's recommendations to notify the State Bench and Area Benches.

4. Jurisdiction and Authority of the Central and State Governments in Constituting GSTAT Benches:
The court clarified that the Central Government has the sole authority to specify the State Bench of the Appellate Tribunal, while the State Government can request the creation of Area Benches. The GST Council's recommendation is necessary for the Central Government to constitute Area Benches. The court quashed the proposal by the Commissioner of Commercial Tax, U.P., as it was not a proposal of the State Government and contradicted the earlier approved proposals.

5. Impact of the Non-availability of GSTAT on the Rights of Aggrieved Persons:
The court noted that the non-availability of the GSTAT in Uttar Pradesh has left aggrieved persons without a statutory appellate remedy since the enactment of the CGST Act. The court directed the GST Council to forward its recommendation from the 39th meeting to the Central Government and for the Central Government to notify the State Bench at Prayagraj and the Area Benches at Ghaziabad, Lucknow, Varanasi, and Agra within a specified timeframe. The court also directed that no coercive action be taken against the petitioners until the establishment of the GSTAT Benches.

Conclusion:
The writ petitions were disposed of with directions to ensure the constitution and functioning of the State Bench and Area Benches of the GSTAT in Uttar Pradesh. The reliefs sought by the petitioners were granted, and the court emphasized the need for compliance within the stipulated timeframe.