The Central Government and the State Governments of Punjab & Haryana along with the GST Council are vexed by the issue of notice on them, by the State High court of Punjab & Haryana. HC issued the notice in the backdrop of a petition filed by one Mr Umang Goyal, an advocate.
The bench that issued notice comprises of Justices Ajay Kumar Mitta and Manjari Nehru Kaul. Petitioner has challenged that the provisions of Section 96 and Section 99 of the State GST Act (P&H).
The petition states that these sections have been contravened while constituting the P&H authority and appellate authority for advance rulings (AAR and AAAR), by making subsequent adjustments in its formation to suit the interest of the legislature over the judiciary.
Such an amendment violates Article 14 and 50 of the Constitution of India as it is contrary to the “Doctrine of separation of powers and independence of the judiciary”. The petitioner referred to two judgements passed, that upheld the view of mandatorily having judicial members as a part of the state or national committees constituted under any law.
Section 96(2) of the Haryana GST Act and the Punjab GST Act covers the provisions governing the constitution of the AAR and AAAR respectively.
The AAR consists of one member each from both the Central and the State Tax Offices, to be appointed by the Central government and the state government, respectively. Whereas, the appellate authority-AAAR must consist of Chief Commissioner of Central Tax as designated by CBIC and the Commissioner of the State Tax.
However, Haryana Government issued a notification on 18th October 2017 by which the AAR was to be constituted of two members, i.e., Additional Excise and Taxation Commissioner, Haryana and Joint Commissioner (GST), Panchkula.
Additionally, another notification was issued on the same day to constitute AAAR to comprise Chief Commissioner of Central Tax as designated by the board and the Commissioner of State Tax. The Punjab Government amended the constitution of AAR and replaced Joint Commissioner, Chandigarh by Joint Commissioner, CGST and Joint Commissioner of State Tax, Punjab, by Commissionerate, Jalandhar, as appointed by the Centre.
In the pre-GST era, AAR was headed by a retired Supreme Court judge and was later amended to include a retired Chief Justice of a High Court or a high court judge having seven years of experience. The other members were from the Indian Revenue Service or Indian Legal Service who served in CBEC (presently renamed as CBIC)