the essay of 11 October 2023 · the untouched capture
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<p align="justify"><font color="663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">OCTOBER 11, 2023</font></strong></font></p>
<p align="center"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Lawyers' Journey to the GST Appellate Tribunal Bench</strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><u>By Vijay Kumar</u></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECTION</STRONG> 110(1)(b) of the CGST Act 2017 [before substitution by the FA, 2023 w.e.f 01.08.2023] stipulated that <em>a person shall not be qualified for appointment as a Judicial Member of the GST Appellate Tribunal unless he </em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) has been a Judge of <font color="#FF0000">the</font> High Court; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) is or has been a District Judge qualified to be appointed as a Judge of a High Court; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) is or has been a Member of Indian Legal Service and has held a post not less than Additional Secretary for three years. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And what is </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFFF00" span="span">the </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">High Court? </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFFF00" span="span">The</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> High Court should refer to a particular High Court. Maybe we would need the Supreme Court to clarify that '</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFFF00" span="span">the</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> High Court' means' </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFFF00" span="span">any</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> High Court'. Please note the High Court in the second condition above is "<font color="#FF0000">a</font> High Court" not "<font color="#FF0000">the</font> High Court". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, only a judge or an 'Indian Legal Service' officer could be appointed as Judicial Members. And no lawyer, however talented he is, could join the GSTAT as a Judicial Member. Isn't this ridiculous? How can you exclude lawyers from the Bench of a Tribunal which has to decide several questions of LAW? A District Judge with a secret dream of becoming a High Court judge, or an Indian Legal Service superstar with a three-year tenure as an Additional Secretary could hope to be a Judicial Member of the Tribunal. But a lawyer? No, lawyers were not welcome. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In UNION OF INDIA Vs R GANDHI, PRESIDENT MADRAS BAR ASSOCIATION - <a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2010/2010-TIOL-39-SC-MISC.htm" target="_blank"><strong>2010-TIOL-39-SC-MISC</strong></a>, the Supreme Court posed the following questions: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#CCCCCC" span="span">Can the legislature provide that a law graduate with a masters' degree in company law can be a judicial member without any experience as a lawyer or a judge? Or can the legislature provide that an Upper Division Clerk having fifteen years experience in the company law department but with a Law Degree is eligible to become a Judicial Member? Or can the legislature provide that a 'social worker' with ten years experience in social work can become a technical member? Will it be beyond scrutiny by way of judicial review? </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And made an observation: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#CCCCCC" span="span">A lifetime of experience in administration may make a member of the civil services a good and able administrator, but not a necessarily good, able and impartial adjudicator with a judicial temperament capable of rendering decisions which have to </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#CCCCCC" span="span">(i) inform the parties about the reasons for the decision; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#CCCCCC" span="span">(ii) demonstrate fairness and correctness of the decision and absence of arbitrariness; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#CCCCCC" span="span">(iii) ensure that justice is not only done, but also seem to be done. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Supreme Court held: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#CCCCCC" span="span"><em>Only Judges and Advocates can be considered for appointment as Judicial Members of the Tribunal. Only the High Court Judges, or Judges who have served in the rank of a District Judge for at least five years or a person who has practiced as a Lawyer for ten years can be considered for appointment as a Judicial Member. Persons who have held a Group A or equivalent post under the Central or State Government with experience in the Indian Company Law Service (Legal Branch) and Indian Legal Service (Grade-1) cannot be considered for appointment as judicial members as provided in sub-section 2(c) and (d) of Section 10FD. The expertise in Company Law service or Indian Legal service will at best enable them to be considered for appointment as technical members. </em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This judgement came in 2010 and when the CGST Act was born in 2017, this was known to all the powers that be, but still they excluded lawyers from being appointed as Judicial Members of the GST Appellate Tribunal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was challenged in the Madras High Court by the REVENUE BAR ASSOCIATION and the High Court observed- <a href="https://taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTUyNDQ1" target="_blank"><strong>2019-TIOL-2188-HC-MAD-GST</strong></a>: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">61. Even though the constitutional validity of Section 110(1)(b) cannot be struck down on the ground of non-inclusion of advocates as being eligible for being considered for appointment as Judicial Member to the Appellate Tribunal under the CGST or TNGST, yet this court is of the opinion that the Union of India must evaluate as to why it is making a departure from the existing practice. Advocates are eligible to be appointed as Judicial Members in the ITAT which is the oldest Tribunal in the country. Lawyers are eligible for appointment as Judicial Member in the Customs Excise Service Tax Appellate Tribunal. Mr. Arvind Datar is justified in contending that when the constitution provides that lawyers are eligible to be appointed as Judges of the High Court, then there is no reason to exclude them from being considered for appointment as Judicial Members. The Hon'ble Supreme Court in R.K. Jain vs. Union of India's case in paragraph 67 has held that the Members of the Tribunal must have a judicial approach and also knowledge and expertise in the particular branch of Law. A lawyer practising for 10 years in Taxation would definitely be well-equipped to grapple with the legal issues arising under the Act. </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFD7AE" span="span">It is to be noted that there is no reason given by the Union of India in their counter as to why lawyers have been excluded from the zone of consideration. </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For deciding the issues arising under the CGST Act and more particularly under Chapter III, it is necessary that the Judicial Member must have knowledge of various legal topics for which purpose a lawyer with sufficient experience and particularly with experience in Taxation Laws will be ideal to be appointed as a Judicial Member. Keeping in mind the existing practice in appointing lawyers to various Tribunals as Judicial Members and the various issues that are likely to arise while adjudicating disputes under the CGST Act, we recommend that the Parliament should reconsider the issue regarding the eligibility of lawyers to be appointed as Judicial Members in the Appellate Tribunal. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also see <strong><a href="https://taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTYwMzg3" target="_blank">2020-TIOL-1391-HC-MAD-GST</a>. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Obviously, the Government did not appreciate the recommendation of the High Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 31st March, 2023, the President gave assent to the Finance Act, 2023, by which old section 110 was substituted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It should be noted that in the same case <em>(Revenue Bar Association)</em>, the Madras High Court struck down two provisions of the GST Act, related to the Tribunal. The High Court held: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(i) Section 110(1)(b)(iii) of the CGST Act which states that a Member of the Indian Legal Services, who has held a post not less than Additional Secretary for three years, can be appointed as a Judicial Member in GSTAT, is struck down. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Secti</font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>on 109(3) and 109(9) of the CGST Act, 2017, which prescribes that the tribunal shall consists of one Judicial Member, one Technical Member (Centre) and one Technical Member (State), is struck down. </em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court held that Indian Legal Service officers were not eligible to be appointed as Judicial Members and that the number of technical members in a Bench cannot be more than the number of judicial members. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe, following the High Court judgement, the Government made amendments in the CGST Act, by the Finance Act, 2023. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The substituted Section 110 [w.e.f 01.08.2023] stipulates: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A person shall not be qualified for appointment asa Judicial Member, unless he— </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) has been a Judge of </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFFF00" span="span">the</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> High Court; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) has, for a combined period of ten years, been a District Judge or an Additional District Judge. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, ILS officers are out, but lawyers are not in. Why? Most of the Judicial Members appointed in CESTAT were practicing lawyers and this has given us highly competent Judicial Members. Now, you are blocking lawyers and going in search of District Judges and very soon you will find that not enough district judges are interested in this job. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As far as lawyers as members is concerned, though the government proposed to amend the law to exclude 'Indian Legal service Officers', lawyers are still not made eligible. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFFF00" span="span">the</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> High Court remains?We are not sure which high court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When lawyers can be appointed as Supreme Court judges, why can't they be appointed as Members of the GST Appellate Tribunal? Why, but why? The Madras High Court noted that there was </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFFF00" span="span">no reason </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> given by the Union of India in their counter as to why lawyers have been excluded. Maybe GST law is a little too serious a subject to be left to lawyers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Madras Tax Bar has challenged the amended Section 110 in the Supreme Court last month as - </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> - <em>Advocates aren't eligible to apply as judicial members. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> - <em>In no tribunal across the country are advocates barred from being judicial members</em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the meantime, the GST Council meeting took place last week and the PIB Press Release states: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFD7AE" span="span">The Council <strong> </strong>has <strong> </strong>recommended amendments in section 110 of the CGST Act, 2017 to provide that: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFD7AE" span="span"> - an advocate for ten years with substantial experience in litigation under indirect tax laws in the Appellate Tribunal, Central Excise and Service Tax Tribunal, State VAT Tribunals, by whatever name called, High Court or Supreme Court to be eligible for the appointment as judicial member. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <a href="https://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=45230" target="_blank">March 2023</a>, I wrote;</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFD7AE" span="span">Anyway, it is not as if the GST Appellate Tribunal is to start tomorrow. It's a long process. This amendment has to be enacted in the Centre and then by the State legislatures, process has to be initiated to select Members of the Tribunal, Infrastructure - buildings, computers, staff, finance etc., must be arranged and perhaps the law has to be again amended if the new provision is struck down by any High Court or Supreme Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFD7AE" span="span">Until then, lawyers relax; though you are not eligible to be in the Bench, you are not barred from the bar and you still have the Supreme Court! </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finally, lawyers are allowed to cross the bar into the Bench in the GST Appellate Tribunal. Great gesture by the government. Let us hope they will make the Tribunal functional soon – with lawyers on the Bench. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Next week </font></p>
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