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SC Issues Notice Challenging CGST Provision filed by Sales Tax Bar Association

SC's Order for Sales Tax Bar Association & Anr

The Supreme Court in recent times has issued a writ petition notice contesting the validity of the constitution of sections 149 and 150 of the Finance Act, 2023 that seek to substitute Sections 109 and 110 of the Central Goods and Services Tax Act, 2017 (CGST Act). Such provisions pertained to the appointments and the service conditions of the members of the Appellate Tribunal under the CGST Act.

Petitioner no. 1 is the Sales Tax Bar Association and Petitioner no. 2 is a member of the same. The plea was listed to the Bench of Justices CJI DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra.

Section 109 furnishes for the constitution of the Goods and Services Tax Appellate Tribunal and Section 110 states the appointment, qualification, and conditions of service of the President and Members of the Appellate Tribunal.

The petition challenges certain sections based on legal precedents set in the Madras Bar Association cases spanning from 2010 to 2021. Notably, the Bench has linked this petition with another one contesting the Tribunals Reforms (Rationalization and Conditions of Service) Ordinance 2021, now the Tribunals Reforms Act, 2021.

The petitioners contest the validity of these provisions on multiple grounds:

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“The government’s unilateral power to transfer members severely weakens the principle of separation of powers” the petition emphasizes.

Lastly, the petitioner reinforces these arguments by referencing the 272nd Law Commission report, which aligns its recommendations with the aforementioned judgments. Consequently, the petitioners assert that the current provisions starkly contradict these recommendations and established principles.

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