In a significant legal development, the Sales Tax Bar Association has mounted a formidable challenge against the constitutional validity of Sections 149 and 150 of the Finance Act, 2023. These sections aim to replace Sections 109 and 110 of the Central Goods and Services Tax Act, 2017 (CGST Act), specifically addressing the appointments and conditions of service of Appellate Tribunal members.
The Sales Tax Bar Association, alongside one of its members, brought the writ petition before a distinguished Bench comprising Chief Justice DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra. The crux of the challenge revolves around the provisions concerning the constitution of the Goods and Services Tax Appellate Tribunal and the qualification, appointment, and conditions of service of its President and Members.
The petition draws inspiration from a series of judgments, spanning from 2010 to 2021, particularly emphasizing the principles laid down in the Madras Bar Association cases. Notably, the Supreme Court has coupled this petition with another challenging the Tribunals Reforms Act, 2021.
Several grounds form the basis of the challenge:
- Lack of provision for Advocates to become Judicial Members, allegedly violating established legal precedents.
- Critique of the short and seemingly inadequate maximum tenure for members, deemed insufficient for a tribunal dedicated to specialized functions.
- Contradiction with a recent Supreme Court mandate, which specifies a member’s term should be 5 years.
- Opposition to Section 110(14), asserting that the provision allowing the President or members to appear beyond their assigned benches violates principles of prudence and impartiality.
- Criticism of the definition of a principal bench and state, arguing that the mandatory inclusion of only 4 members is irrational and arbitrary.
Moreover, the challenge extends to provisions regarding terms, salary, allowances, and the removal of members. The petition contends that such provisions infringe upon the doctrine of separation of powers, allowing the government undue control and discretion in these matters.
The petition draws additional strength from the 272nd Law Commission report, which aligns with the arguments presented, asserting that the impugned provisions are in direct contradiction to established recommendations and principles.
The writ petition, identified as SALES TAX BAR ASSOCIATION (REGD.) & ANR v. UNION OF INDIA & ORS., WRIT PETITION (CIVIL) Diary No(s). 40083/2023, now stands as a landmark challenge before the Supreme Court, signaling a critical examination of the CGST Appellate Tribunal provisions.
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