Allahabad HC refers GST Tribunal establishment matter to Larger Bench as UP dealers lack statutory appeal remedy under Section 112

Allahabad HC referred matter to Larger Bench concerning non-establishment of GST Tribunal State Bench and Area Benches in Uttar Pradesh, leaving dealers without statutory appeal remedy under Section 112 of CGST/UP GST Act 2017. Court noted alarming situation where entire class of dealers rendered remediless. Three questions referred including whether interim order conflicted with Division Bench judgment, whether immediate direction needed for tribunal establishment, and establishment of State Bench at Prayagraj with four Area Benches as per earlier Division Bench order.

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Issues Involved:
1. Maintainability of the writ petition under Article 226 of the Constitution of India.
2. Non-constitution of the GST Tribunal in Uttar Pradesh.
3. Impact of the interim order dated 04.03.2021 in PIL CIVIL No.6024 of 2021 on the establishment of the GST Tribunal.
4. Legal principles regarding the grant of interim orders in public interest litigations.
5. Referral to a Larger Bench for resolution of key questions.

Issue-wise Detailed Analysis:

1. Maintainability of the writ petition under Article 226 of the Constitution of India:
The respondents raised a preliminary objection regarding the maintainability of the writ petition, arguing that the petitioner has a statutory remedy of appeal under Section 112 of the Central Goods and Service Tax Act, 2017 (CGST Act, 2017). However, due to the non-constitution of the GST Tribunal in Uttar Pradesh, the petitioner and other dealers are left without a remedy. The court acknowledged that the High Court under Article 226 has wide powers but emphasized that such powers are not limitless. The court noted that the petitioner had no other recourse due to the absence of the Tribunal.

2. Non-constitution of the GST Tribunal in Uttar Pradesh:
The court discussed the statutory mandate under Section 109 of the CGST Act, 2017, which requires the Central Government to constitute the GST Appellate Tribunal on the recommendation of the GST Council. The non-constitution of the Tribunal has left approximately 14 lakh registered dealers in Uttar Pradesh without a remedy since 2017. The court highlighted the urgency and necessity of establishing the Tribunal to address the appeals of the dealers.

3. Impact of the interim order dated 04.03.2021 in PIL CIVIL No.6024 of 2021:
The interim order directed the respondents not to establish the GST Appellate Tribunal without the leave of the court. This order was passed in conflict with a final judgment dated 09.02.2021 in Writ Tax No.655 of 2018, which had directed the establishment of the Tribunal. The court questioned the validity of such an interim order, emphasizing that a coordinate bench cannot pass an order that effectively stays or dilutes the effect of a final judgment by another coordinate bench.

4. Legal principles regarding the grant of interim orders in public interest litigations:
The court referred to several Supreme Court judgments to outline the principles governing the grant of interim orders. It emphasized that courts should be cautious in granting interim relief, especially when public interest is involved. Interim orders should not stultify statutory provisions unless the statute is manifestly unconstitutional. The court cited cases like Jaishri Laxmanrao Patil vs. State of Maharashtra and Union of India vs. Cipla Ltd., which stress the need for judicial restraint and careful consideration of public interest and the balance of convenience.

5. Referral to a Larger Bench for resolution of key questions:
Given the significant issues arising from the non-establishment of the GST Tribunal and the conflicting interim orders, the court referred the matter to a Larger Bench. The key questions for the Larger Bench include:
- Whether the interim order dated 04.03.2021 could be passed in conflict with the final judgment dated 09.02.2021.
- Whether a direction should be issued to notify the State Bench and Area Benches of the GST Appellate Tribunal in Uttar Pradesh immediately.
- The establishment of the State Bench of the GST Appellate Tribunal at Prayagraj and its four Area Benches as per the final judgment dated 09.02.2021.

The court concluded by directing that the order and records be placed before the Chief Justice for the constitution of a Larger Bench to ensure that dealers in Uttar Pradesh can avail the statutory remedy of appeal under the CGST/UP GST Act, 2017.

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