Himachal Pradesh High Court Stays Service Tax-Cum-Divisional Commissioner’s Order As GSTAT Not Constituted

The Himachal Pradesh High Court has stayed the service tax-cum-divisional commissioner’s order as GSTAT was not constituted.

The bench of Justice Sandeep Sharma has observed that in the absence of GSTAT i.e., the appellate tribunal, the petitioner had no option but to approach the High Court by way of a petition filed under Article 227 of the Constitution of India, which otherwise empowers the Court to exercise supervisory powers over all the courts subordinate to it, including the authorities exercising quasi-judicial powers.

Since there is no appellate tribunal, which is otherwise required to be constituted in terms of provisions contained under Section 109 of the Himachal Pradesh Goods and Services Tax Act, the 2017 petitioner/assessee was compelled to approach the High Court under Article 227 of the Constitution of India.

The petitioner sought direction from the respondent/department not to act in furtherance of the order passed by the Commissioner (Appeals), HP Goods and Service Tax-cum-Divisional Commissioner, Shimla Division. The appeal was filed by the petitioner under Section 107(1), challenging the order passed by the Joint Commissioner of State Taxes and Excise, Central Enforcement Zone, Una, which came to be dismissed.

The respondent issued a show cause notice titled "intimation of tax as being payable under Section 73 (5) or 74 (5)," by which the petitioner was intimating with regard to its liability to pay the tax. After receipt of the show cause notice, the petitioner filed representation, but the respondent directed the petitioner to deposit the due amount of tax, interest, and penalty within three weeks of the passing of the order. The petitioner filed an appeal under Section 107 (1) against the order, which was dismissed.

The assessee contended that though provisions contained under Section 112 (1) give the right of appeal to the petitioner to approach the appellate tribunal, it is otherwise required to be constituted under Section 109. However, since it has yet to be constituted, the petitioner was compelled to approach the High Court in the proceedings filed under Section 227 of the Constitution of India.

The department contended that a petition under Article 227 of the Constitution of India is not maintainable, especially when there is a specific remedy provided under the GST Act itself.

The court noted that once there is a specific provision for filing an appeal against the order passed by the appellate authority in the appellate tribunal and such a tribunal is yet to be constituted under Section 109, there is no alternative efficacious remedy available to the petitioner save and except petition under Article 227 of the Constitution of India, which otherwise enables the court to exercise supervisory jurisdiction over all the courts subordinate to it, including the courts exercising quasi-judicial powers.

The court directed the respondent not to act in furtherance of the order passed by the appellate authority until the appellate tribunal, in terms of Section 109 of the Act, is constituted by the State of Himachal Pradesh.

Case Title: M/s Vardhman Ispat Udyog Versus State of Himachal Pradesh and Ors.

Citation: 2023 LiveLaw (HP) 63

Case No.: CMPMO No. 447 of 2023

Date: 18.8.2023

Counsel For Petitioner: Shrawan Dogra

Counsel For Respondent: Rajan Kahol

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