The Gujarat High Court has agreed to hear a petition praying that provisions concerning the Authority of Advance Ruling (AAR) and the Appellate Authority of Advance Ruling (AAAR) under the Central Goods and Services Tax be declared ultra vires for being coram non judice as it has no judicial member on it.
Admitting the petition for hearing, the high court has issued notice to the Centre, the GST Council and the Government of Gujarat on a petition moved by Nipun Praveen Singhvi wherein he said before the pre-GST regime, the Authority of Advance Ruling was headed by a judicial member, but after GST, the government has “eliminated” judicial member from AAR and AAAR.
Singhvi’s counsel Vishal J Dave said earlier the AAR was headed by a judicial member who was a retired Supreme Court judge but subsequently, after the enactment of the GST, the respondents have eliminated judicial member from the constitution of the AAR and AAAR, which provide for tax liability in advance besides clarifications on tax provisions.
The petitioner also submitted that as per the legislation under the GST Act, the decision of AAR and AAAR is binding on the applicant and therefore, the advance ruling body is acting in a judicial capacity.
“Therefore, the authority is a body exercising judicial power and is a Tribunal within the meaning of the expression in articles 136 and 227 of the Constitution. However, as there is total absence of a judicial member in the constitution of AAR and AAAR, it is coram non judice,” said the petitioner, who is a professional consultant in tax matters.
The petition also challenged the constitution of AAR under the Gujarat Goods and Services Act while adding that wheile AAR under the Income Tax Act, Custom Act, Central Excise Act and Service Tax has as its chairman a retired high court judge and and as vice chairman a retired Supreme Court judge, under GST there is no judicial member and only one member officer of central tax and one officer of state tax has been included which is in violation of Article 14 and 50.
Since the Government of Gujarat has already constituted the coram for the Gujarat Authority for Advance Ruling and the appellate authority, the petitioner urged that till the pendency of the petition, the same be directed to not pass any order.
The petitioner said he has moved court against the “tribunalisation and bureaucratisationof justice and its impact on judicial independence and separation of powers”.
“The formation of AAR and AAAR is an excessive delegation of legislative functions without placing any guidelines and is violative of Article 14 and 50 of the Constitution.
“Legal proceeding before the AAR and AAAR is outside the presence of a judge (without a judge), with improper venue, or without jurisdiction, therefore, any adjudication and judgment passed by the AAR and AAAR which has no authority to adjudicate under the Act is clearly in violation of the Article14 and 50 of the Constitution of India and would be coram non judice and nullity,” said the petitioner.
It added that “in terms of section 96 of the CGST and SGST Act, the Parliament has abdicated its authority by empowering the Central Government and the state Government to frame Rules which amounts to delegation of essential functions and granting of uncanonised power to the executive to control vital bodies that perform, in essence, judicial functions”.