GST Tribunal Bench constitution depends on valid Council recommendation; unauthorized later proposal could not replace earlier approved plan.

The Allahabad HC held that, under the CGST and UP GST Acts, constitution and notification of the State Bench and Area Benches of the GST Tribunal rest with the Central Government acting on the GST Council's recommendation, while the State Government's role is limited to requesting Area Benches. It further held that a later proposal dated 29.05.2020, originating from an officer lacking the required authority, could not validly replace the earlier approved recommendation for a State Bench at Prayagraj and four Area Benches. The impugned later proposal and 40th Council approval were set aside, and the earlier recommendation was restored for implementation.

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Issues: (i) Whether, under Section 109(6) of the Central Goods and Services Tax Act, 2017 read with Section 109 of the Uttar Pradesh Goods and Services Tax Act, 2017, the Central Government was required to notify a State Bench and Area Benches for Uttar Pradesh on the GST Council's recommendation; (ii) whether the proposal dated 29.05.2020 and the approval granted in the 40th meeting of the GST Council could displace the earlier recommendation for a State Bench at Prayagraj (Allahabad) and four Area Benches.

Issue (i): Whether, under Section 109(6) of the Central Goods and Services Tax Act, 2017 read with Section 109 of the Uttar Pradesh Goods and Services Tax Act, 2017, the Central Government was required to notify a State Bench and Area Benches for Uttar Pradesh on the GST Council's recommendation?

Analysis: The statutory scheme places the power to constitute and notify the State Bench in the Central Government, acting on the recommendation of the GST Council. The State Government's role is confined to requesting Area Benches, while the Council's recommendation becomes operative for the Central Government's notification under the Act. The Uttar Pradesh enactment also adopts the same structure by making the constitution and jurisdiction of the State Bench and Area Benches subject to Section 109 of the Central Act.

Conclusion: The obligation to notify the State Bench and the Area Benches lay with the Central Government once the Council's recommendation was in place.

Issue (ii): Whether the proposal dated 29.05.2020 and the approval granted in the 40th meeting of the GST Council could displace the earlier recommendation for a State Bench at Prayagraj (Allahabad) and four Area Benches?

Analysis: The proposal dated 29.05.2020 emanated from the Commissioner, Commercial Tax, and not from the State Government in accordance with the applicable business rules. It was inconsistent with the earlier proposals sent by the competent State authority and could not validly supplant them. The 40th meeting recommendation, being founded on that unsustainable proposal, could not override the earlier approved proposal of the 39th meeting for a State Bench at Prayagraj (Allahabad) and four Area Benches at Ghaziabad, Lucknow, Varanasi and Agra.

Conclusion: The later proposal and the consequent 40th meeting approval were quashed, and the earlier 39th meeting recommendation was restored for implementation.

Final Conclusion: The reliefs seeking constitution of the State Bench and Area Benches in Uttar Pradesh succeeded, the impugned later proposal and approval were set aside, and the authorities were directed to act on the earlier GST Council recommendation and make the Tribunal functional.

Ratio Decidendi: Where the statute entrusts constitution and notification of GST Tribunal Benches to the Central Government on the GST Council's recommendation, an inconsistent proposal made by an officer lacking authority cannot displace a valid earlier recommendation, and the executive must act in conformity with the statutory scheme.

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