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of <h1>Petition on constitutionality of Section 109 CGST/GGST rendered infructuous after Finance Act 2023 amends tribunal bench composition</h1> HC held that the petition challenging constitutionality of Section 109 of the CGST/GGST Acts became infructuous after the Finance Act, 2023 substituted ... Constitutional validity of Section 109 the CGST Act and GGST Act relating to constitution of Appellate Tribunal - violative of the doctrine of separation of powers and independence of judiciary - HELD THAT:- During the pendency of this petition, by the Finance Act, 2023, the provision of Section 109 of Goods and Service Tax Act (for short GST Act) regarding constitution of appellate tribunal and benches thereof has been substituted with effect from 1st August, 2023. The amended provision of sub Section 4 of Section 109 of the GST Act provides for bench of the tribunal consisting of two judicial members, a technical member (Centre) and technical member (State), instead of one judicial member, one technical member (Centre) and one technical member (State), which was provided at the time of enactment of the GST Act. In view of such amendment, the grievance raised in this petition would not survive and the same is accordingly disposed of as having become infructuous. ISSUES PRESENTED AND CONSIDERED 1. Whether the statutory scheme for constitution of the Appellate Tribunal under Section 109 of the Goods and Services Tax Act (originally providing one judicial and two technical members) is constitutionally valid vis-à-vis Articles 14 and 50 and the doctrine of separation of powers and independence of judiciary. 2. Whether the provisions concerning qualification, appointment and conditions of service of members of the Appellate Tribunal under Section 110 (as challenged) are constitutionally vulnerable to attack under Articles 14 and 50 and the principles laid down in Union of India v. R. Gandhi. 3. Whether judicial precedent (including the principle in R. Gandhi and the decision of the Madras High Court in S. Manoharan) bearing on the permissible composition of administrative/adjudicatory tribunals applies to invalidate the challenged provisions. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Constitutional validity of Section 109 (constitution and composition of the Appellate Tribunal) Legal framework: At enactment, Section 109 prescribed a three-member bench comprising one judicial member, one technical member (Centre) and one technical member (State). The challenge asserted that this composition left the judicial member in minority on benches deciding complex questions of taxing statutes, infringing Article 14, Article 50 (principles of separation and independence of judiciary) and the basic-structure doctrine. Precedent treatment: Petitioners relied on the Supreme Court principle in R. Gandhi (which imposes guards against administrative majorities overruling judicial members on adjudicatory bodies) and a Division Bench decision of the Madras High Court in S. Manoharan, which applied R. Gandhi to hold impermissible a tribunal bench where judicial membership was in the minority. Interpretation and reasoning: The Court noted that, while the constitutional challenge related to the original composition, Parliament amended Section 109 by the Finance Act, 2023 effective 1 August 2023. The substituted sub-section 4 provides for benches consisting of two judicial members, a technical member (Centre) and a technical member (State) - thereby ensuring judicial members are not in minority. Given the legislative amendment directly addresses the core complaint about judicial minority on benches, the specific grievance advanced in the petition no longer survives. Ratio vs. Obiter: The Court did not undertake a substantive constitutional adjudication on the original provision's validity against Articles 14/50 or the R. Gandhi line of authority. The reasoning that the petition is rendered infructuous by legislative amendment is ratio for disposal on procedural/mootness grounds; any observations about precedent application are obiter insofar as no final ruling on substantive constitutionality was made. Conclusions: The challenge to Section 109's original composition is disposed of as infructuous in light of the statutory amendment that provides a bench with two judicial members, and no adjudication on merits of constitutional invalidity was necessary. Issue 2 - Validity of Section 110 (qualification, appointment and conditions of service of Tribunal members) Legal framework: Petitioners sought declaration that Section 110, dealing with qualifications, appointment and conditions of service of Tribunal members, is ultra vires Articles 14 and 50 and contravenes the doctrine of separation of powers and judicial independence as articulated in R. Gandhi. Precedent treatment: Petitioners invoked R. Gandhi as the controlling principle on appropriate composition and safeguards for tribunals; the petition also relied on analogous tribunal-composition jurisprudence exemplified by S. Manoharan. Interpretation and reasoning: The Court's order addresses the challenge to Section 109 expressly in light of the amendment. The petition included a prayer against Section 110, but the Court's disposal is driven by the change in composition under Section 109; no separate substantive determination was recorded on Section 110's provisions concerning qualifications, appointment and conditions of service. Consequently, the Court treated the constitutional attack as subsumed by the change that removed the principal complained-of structural defect. Ratio vs. Obiter: Any implied treatment of Section 110 in the order is obiter because the Court did not decide the substantive constitutional questions regarding qualifications, appointment or conditions of service; the dispositive ground was infringement of litigational purpose through statutory amendment (mootness/infructuousness). Conclusions: The petition's challenge to Section 110 was not adjudicated on merits; the petition is disposed as infructuous in consequence of the amendment to Section 109, and no declaration was made as to Section 110's constitutional validity. Issue 3 - Application of R. Gandhi and related precedents to the challenged provisions Legal framework: R. Gandhi establishes that adjudicatory tribunals must preserve the role and primacy of judicial members so that judicial independence and separation of powers are not undermined by administrative majorities on such bodies. Precedent treatment: The petition relied on R. Gandhi and the Madras High Court decision in S. Manoharan which applied R. Gandhi to invalidate a tribunal composition where judicial members were numerically in a minority. Interpretation and reasoning: The legislative amendment increasing judicial representation on tribunal benches directly addresses the fundamental concern expressed by R. Gandhi - namely, preventing administrative majorities from overshadowing judicial members on adjudicatory benches. Because the amendment ensures judicial members will not be in a minority, the factual and legal basis for invoking R. Gandhi to strike down the statutory scheme no longer exists in the form challenged. Ratio vs. Obiter: The Court did not overrule, follow or distinguish R. Gandhi on the merits; instead, it recognized the precedent's relevance to the petitioners' grievance but disposed the petition on the ground of amendment-induced infructuousness. Any comment on how R. Gandhi would apply to the amended scheme is obiter. Conclusions: The amendment renders application of R. Gandhi to invalidate the prior composition unnecessary; no substantive pronouncement was made on how R. Gandhi would apply to the amended statutory composition. OVERALL CONCLUSION / DISPOSITION The petition challenging the constitutional vires of the statutory composition of the Appellate Tribunal under Section 109 (and related provisions) is disposed of as having become infructuous following the Finance Act, 2023 amendment which reconstitutes benches to include two judicial members and technical members for Centre and State. The Court discharged notice and did not decide the substantive constitutional questions on the merits; therefore no declaration was issued on Articles 14 or 50, nor was Section 110 adjudicated substantively. (Disposition based on mootness/infructuousness rather than merit.)
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