Introduction
The Goods and Services Tax was introduced with the promise of simplification, uniformity, and certainty. However, for several years after its implementation, GST functioned with a deficiency—the absence of the Goods and Services Tax Appellate Tribunal (GSTAT). A tax system no matter how well designed cannot operate effectively without a credible and accessible dispute resolution mechanism.
For nearly eight years, taxpayers are compelled to approach High Courts against orders passed by the First Appellate Authority, even in routine matters involving input tax credit, refunds, classification, or procedural lapses. This situation disturbed the appellate hierarchy as laid down under the CGST Act and placed an avoidable burden on courts. The operationalisation of GSTAT, therefore, is not merely an administrative milestone—it is a long-overdue correction essential to the integrity of the GST framework.
Right to Appeal as a Substantive Safeguard
The right to appeal, once granted by statute, is not a matter of convenience but a substantive legal safeguard. The Supreme Court in Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh (1953 AIR 221) held that the right of appeal is a vested right that accrues on the date of initiation of proceedings.
Under GST, Parliament provided a three-tier appellate structure under Sections 107, 112, and 117 of the CGST Act. The long-awaited non-constitution of GSTAT made Section 112 practically inoperative and diluted the statutory right of appeal. Taxpayers were left with no effective remedy other than invoking writ jurisdiction—an outcome never intended by the legislature.
This gap resulted in inconsistent judicial approaches, increased litigation costs, and serious access-to-justice concerns, particularly for small and medium enterprises who could not afford to approach High Courts easily.
Constitution and Tribunal Independence
In Union of India v. R. Gandhi (2010) 11 SCC 1, the Supreme Court laid down that tribunals discharging judicial functions must possess independence equivalent to that of courts they replace.
These principles were reaffirmed in Madras Bar Association v. Union of India (2021) 7 SCC 369, where the Court emphasised that excessive executive control over appointments, tenure, and service conditions of tribunal members undermines judicial independence and violates the basic structure of the Constitution.
The GSTAT framework underwent necessary legislative correction to comply with these conditions. The present structure of judicial members alongside technical members from both Centre and State—is the result of this constitutional discipline.
Article 265 and Lawful Tax Collection
Article 265 of the Constitution declares that no tax shall be levied or collected except by authority of law. This authority does not end with statutory enactment; it extends to lawful adjudication of disputes arising under the law.
In the absence of GSTAT, departmental interpretations often attained finality, with judicial review becoming distant, expensive, and delayed. Such a scenario risks converting tax administration into tax imposition. GSTAT restores balance by ensuring that disputes are examined by a specialised judicial forum before revenue demands attain finality.
In this sense, the Tribunal is an essential constitutional checkpoint, not an obstacle to tax collection.
Tribunal as a Check on Administrative Overreach
A significant portion of GST litigation arises not from deliberate evasion but from interpretational ambiguity, procedural lapses, or systemic issues. The aggressive denial of input tax credit, invocation of penalties without mens rea, and rejection of refunds on technical grounds are common areas of dispute.
The Supreme Court in Eicher Motors Ltd. v. Union of India (1999) 2 SCC 361 recognised that credit validly earned is a vested and indefeasible right. These principles remain highly relevant under GST and require careful application by a specialised appellate forum.
GSTAT is expected to apply such jurisprudence preventing excessive enforcement-oriented interpretations while safeguarding legitimate revenue interests.
Role of Professionals and the Tax Bar
Tribunals derive strength not only from statutory design but also from the quality of advocacy before them. Chartered Accountants and Advocates must approach GSTAT with responsibility, jurisprudential depth, and respect for institutional processes.
The role of Tax Law Bar Associations is equally significant. Through academic discussion, training, and constructive engagement, the Bar can help GSTAT evolve into a forum known for consistency, credibility, and reasoned decision-making.
The Way Forward
For GSTAT to fulfil its intended role, certain practical measures are very important:
- Timely and adequate appointments to avoid backlog
- Sufficient benches to ensure accessibility
- Respect for Tribunal orders by field formations
- Smooth transition of pending writ petitions
A strong tribunal will reduce conflicting tax culture and promote voluntary compliance; a weak one will revive uncertainty
Conclusion
The constitution of the GST Appellate Tribunal marks a defining moment in the evolution of India’s GST regime. It completes the statutory architecture, restores appellate balance, and reaffirms faith in institutional justice.
A tax system matures not merely through amendments and notifications, but through fair, consistent, and reasoned adjudication. GSTAT is the forum where GST law will acquire depth, discipline, and stability.
GST, finally, has its missing pillar. Whether it stands firm will depend on how seriously the institution is nurtured by the State, the Bar, and the profession.
The author can be reached at +91-9407557572 & kartik@ackassociates.com.
