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GST Tribunal Not Functional: Rajasthan High Court Grants Relief to Taxpayer Pending Tribunal Constitution

GST Tribunal Not Functional: Rajasthan High Court Grants Relief to Taxpayer Pending Tribunal Constitution

This case involves M/s World Trade Park Ltd. challenging a GST-related order, but the main issue is that the GST Appellate Tribunal—where such appeals should go—is not yet functional. The High Court, following its own earlier decisions, has allowed the petitioner to delay filing an appeal until the Tribunal is set up, provided certain payments are made. The court also protected the petitioner from recovery proceedings in the meantime.

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Case Name

M/s World Trade Park Ltd. vs. Union of India & Ors. (High Court of Rajasthan)

D.B. Civil Writ Petition No. 2359/2024

Date: 24th January 2025

Key Takeaways

  • GST Tribunal Not Yet Constituted: The GST Appellate Tribunal, which is supposed to hear appeals, is not functional yet.
  • Relief for Taxpayers: Taxpayers like M/s World Trade Park Ltd. are allowed to wait to file their appeal until the Tribunal is set up.
  • Protection from Recovery: If the taxpayer pays the amount required under Section 112(8) of the Rajasthan Goods and Services Tax Act, 2017, no recovery action will be taken for the balance amount until the appeal is heard.
  • Consistent Approach: The court followed its own previous orders in similar cases, ensuring uniformity in handling such situations.

Issue

Can a taxpayer be compelled to file an appeal against a GST order when the GST Appellate Tribunal is not yet functional, and what protection is available in the interim?

Facts

  • Parties: The petitioner is M/s World Trade Park Ltd., a company with offices in Mumbai and Jaipur. The respondents include the Union of India, GST Council, and various GST authorities in Rajasthan.
  • Dispute: The company wanted to appeal an order from the First Appellate Court under GST law, but the GST Appellate Tribunal (the next level of appeal) has not been set up yet.
  • Timeline: The case was heard on 24 January 2025. The petitioner argued that they cannot file an appeal because the Tribunal does not exist.
  • Relevant Law: Section 112(8) of the Rajasthan Goods and Services Tax Act, 2017, which deals with appeals to the Tribunal and the conditions for staying recovery.

Arguments

Petitioner (M/s World Trade Park Ltd.)

  • Main Point: The company cannot file an appeal because the GST Appellate Tribunal is not functional.
  • Request: The petitioner asked for protection from recovery proceedings until they are able to file an appeal once the Tribunal is constituted.


Respondents (Union of India & GST Authorities)

  • Main Point: They agreed that the Tribunal is not yet constituted.
  • Precedent: Pointed out that in similar cases (like D.B. Civil Writ Petition No. 1113/2024), the court has allowed taxpayers to wait until the Tribunal is set up, provided they make the payment required under Section 112(8).

Key Legal Precedents

  • D.B. Civil Writ Petition No. 4740/2024, Jagdamba Motors vs. Union of India & Ors. and connected matters: The court had previously decided that taxpayers should be allowed to wait to file appeals until the Tribunal is functional.
  • D.B. Civil Writ Petition No. 1113/2024: The order dated 15.02.2024 in this case was specifically quoted. It allowed petitioners to file appeals within three months from the date the Tribunal is constituted, provided they pay the amount required under Section 112(8) of the Act.
  • Section 112(8) of the Rajasthan Goods and Services Tax Act, 2017: This section allows for a stay on recovery if the taxpayer deposits a certain amount while filing an appeal to the Tribunal.

Judgement

  • Decision: The High Court disposed of the petition, following its earlier orders.
  • Directions:
  • The petitioner must deposit the amount as per Section 112(8) of the Act within three months from the date of the order.
  • No recovery proceedings for the balance amount will be initiated, provided the petitioner files an appeal within three months from the date the Tribunal is constituted.
  • Reasoning: Since the Tribunal is not functional, it would be unfair to penalize the petitioner for not filing an appeal. The court’s approach ensures the petitioner’s right to appeal is preserved and they are protected from recovery actions in the meantime.

FAQs

Q1: What happens if the GST Tribunal is not functional?

A: Taxpayers can wait to file their appeal until the Tribunal is set up. The court protects them from recovery actions if they pay the required amount under Section 112(8) of the Act.


Q2: What is Section 112(8) of the Rajasthan GST Act?

A: It allows a taxpayer to get a stay on recovery of the balance amount if they deposit a specified amount while filing an appeal to the Tribunal.


Q3: Does this mean the taxpayer doesn’t have to pay anything now?

A: No, the taxpayer must pay the amount specified under Section 112(8) to get protection from recovery.


Q4: Is this a one-off decision?

A: No, the court has followed the same approach in several similar cases, ensuring consistency.


Q5: What should the taxpayer do once the Tribunal is set up?

A: File the appeal within three months from the date the Tribunal is constituted.