CGST Section 109 — Constitution of Appellate Tribunal and Benches thereof

CGST Act · Constitution of Appellate Tribunal and Benches thereof

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Section 109 of the CGST Act, 2017 governs Constitution of Appellate Tribunal and Benches thereof. It provides the core statutory basis, outlining the essential legal principles, rights, and liabilities under Indian indirect tax law. Section 109 GST: Constitution of Appellate Tribunal and Benches thereof — eligibility, conditions, case laws and compliance impact under Indian tax law.

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Plain-English Explanation

Plain English Summary

Section 109 of the CGST Act, 2017, outlines the formation of the Goods and Services Tax Appellate Tribunal (GSTAT) and its various Benches. It specifies how these bodies are created, their composition, and the distribution of their responsibilities in hearing appeals against GST-related orders.

This section applies to any business or individual aggrieved by orders passed by the Appellate Authority or Revisional Authority under the GST law. It dictates the structure and function of the tribunal where these appeals can be filed and heard. The section is effective from a date to be notified by the government, upon recommendations of the GST Council, for the establishment of the GSTAT.

Here's a breakdown of the key conditions and exceptions:

Establishment of the Tribunal: The government, based on the Council's recommendations, will establish the GSTAT through notification. The GSTAT is for hearing appeals against orders by the Appellate Authority or Revisional Authority.
Principal Bench: A Principal Bench will be set up in New Delhi, comprising a President, a Judicial Member, a Technical Member (Centre), and a Technical Member (State).
State Benches: State Benches can be formed upon the request of individual states. These benches will consist of two Judicial Members, a Technical Member (Centre), and a Technical Member (State). The Council will recommend the number, location, and jurisdiction of these State Benches.
Jurisdiction: Both the Principal Bench and State Benches handle appeals against orders from the Appellate Authority or Revisional Authority. However, cases involving the place of supply will only be heard by the Principal Bench. Also, the Principal Bench will examine cases related to profiteering as per Section 171(2) of the CGST Act.
Distribution of Business: The President of the GSTAT has the power to allocate cases amongst different benches and can transfer cases between them.
Vice-President: The senior-most Judicial Member within the State Benches acts as the Vice-President, exercising specific powers of the President.
Single Member Benches: Appeals involving tax, input tax credit, fines, fees, or penalties not exceeding fifty lakh rupees, and not involving questions of law, can be heard by a single member, subject to the President’s approval and Council recommendations. Other cases are heard by a Judicial Member and a Technical Member.
Difference in Opinion: If members hearing a case disagree, the point of disagreement is referred to another member. The final decision is based on the majority opinion, including the initial members' views.
Transfer of Members: The government can transfer members between benches in consultation with the President, to promote administrative efficiency. Transfers of State Technical Members are limited to benches within the same state and require consultation with the State Government.
Validity of Proceedings: The validity of GSTAT proceedings is not affected by vacancies or defects in its constitution.

Practical Examples:

Example 1: Place of Supply Dispute: A business in Maharashtra disputes the place of supply determined by the Appellate Authority. Because this involves place of supply, the appeal must be heard by the Principal Bench in New Delhi, not the State Bench in Maharashtra.
Example 2: Small Penalty: A small business faces a penalty of ₹40 lakh. If the appeal doesn't involve a complex legal question, the President can allow a single member of the GSTAT to hear the case. However, if the penalty were ₹60 lakh, or a complex legal question were involved, a bench consisting of one Judicial Member and one Technical Member would hear the appeal.
Example 3: Profiteering: An assessment reveals the company has not passed on the benefit of reduced tax to customers. The case will be examined by the principal bench in New Delhi as per section 171(2) of the CGST Act.

Important Amendments:

The Finance Act, 2023, significantly amended Section 109, primarily by substituting the entire section with a new version. This signifies a substantial overhaul in the composition and functioning of the Appellate Tribunal. The Finance Act, 2024, No. 15 of 2024, then inserted provisions clarifying the jurisdiction of the principal bench relating to profiteering matters and further specifying cases to be heard exclusively by the principal bench. Further, the Finance Act, 2024 substituted sub-section (6) pertaining to the distribution of business among benches. It is crucial to refer to the updated text of the Act to understand the current legal position.

* Section109.Constitution of Appellate Tribunal and Benches thereof.-¹

(1)The Government shall, on the recommendations of the Council, by notification, establish with effect from such date as may be specified therein, an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority , or for conducting an examination or adjudicating the cases referred to in sub-section (2) of section 171, if so notified under the said section².

(2)The jurisdiction, powers and authority conferred on the Appellate Tribunal shall be exercised by the Principal Bench and the State Benches constituted under sub-section (3) and sub-section (4).

(3)The Government shall, by notification, constitute a Principal Bench of the Appellate Tribunal at New Delhi which shall consist of the President, a Judicial Member, a Technical Member (Centre) and a Technical Member (State).

(4)On the request of the State, the Government may, by notification, constitute such number of State Benches at such places and with such jurisdiction as may be recommended by the Council, which shall consist of two Judical Members, a Technial Member (Centre) and a Technical Member (State).

(5)The Principal Bench and the State Bench shall hear appeals against the orders passed by the Appellate Authority or the Revisional Authority: Providedthat the cases in which any one of the issues involved relates to the place of supply, shall be heard only by the Principal Bench. Provided further that the matters referred to in sub-section (2) of²

section 171 shall be examined or adjudicated only by the Principal Bench: Provided also that the Government may, on the recommendations of the Council, notify other cases or class of cases which shall be heard only by the Principal Bench.]

(6)Subject to the provisions of sub-section (5), the President³ shall, from time to time, by a general or special order, distribute the business of the Appellate Tribunal among the Benches and may transfer cases from one Bench to another.

(7)The senior-most Judicial Member within the State Benches, as may be notified, shall act as the Vice-President for such State Benches and shall exercise such powers of the President as may be prescribed, but for all other purposes be considered as a Member.

(8)Appeals, where the tax or input tax credit involved or the amount of fine, fee or penalty determined in any order appealed against, does not exceed fifty lakh rupees and which does not involve any question of law may, with the approval of the President, and subject to such conditions as may be prescribed on the recommendations of the Council, be heard by a single Member, and in all other cases, shall be heard together by one Judicial Member and one Technical Member

(9)If, after hearing the case, the Members differ in their opinion on any point or points, such Member shall state the point or points on which they differ, and the President shall refer such case for hearing,—

(a)where the appeal was originally heard by Members of a State Bench, to another Member of a State Bench within the State or, where no such other State Bench is available within the State, to a Member of a State Bench in another State;]

(b) where the appeal was originally heard by Members of the Principal Bench, to another Member from the Principal Bench or, where no such other Member is available, to a Member of any State Bench, and such point or points shall be decided according to the majority opinion including the opinion of the Members who first heard the case.¹

(10)The Government may, in consultation with the President, for the administrative efficiency, transfer Members from one Bench to another Bench: Providedthat a Technical Member (State) of a State Bench may be transferred to a State Bench only of the same State in which he was originally appointed, in consultation with the State Government.

(11)No act or proceedings of the Appellate Tribunal shall be questioned or shall be invalid merely on the ground of the existence of any vacancy or defect in the constitution of the Appellate Tribunal.], or for conducting an examination or adjudicating the cases referred to in sub-section (2) of section 171, if so notified under the said section².

(2)The jurisdiction, powers and authority conferred on the Appellate Tribunal shall be exercised by the Principal Bench and the State Benches constituted under sub-section (3) and sub-section (4).

(b)where the appeal was originally heard by Members of the Principal Bench, to another Member from the Principal Bench or, where no such other Member is available, to a Member of any State Bench, and such point or points shall be decided according to the majority opinion including the opinion of the Members who first heard the case.

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Frequently Asked Questions

What is the constitution of the Goods and Services Tax Appellate Tribunal (GSTAT) according to CGST Section 109?

The Goods and Services Tax Appellate Tribunal (GSTAT) shall consist of a Principal Bench and State Benches. The Principal Bench is located at New Delhi. Each State Bench shall consist of two Judicial Members, two Technical Members (one from Centre and one from State), and a President of the GST Tribunal.

Who can be appointed as the President of the GSTAT and what are their qualifications according to CGST Section 109?

As per CGST Section 109, the President of the GSTAT must be a retired Judge of the Supreme Court or a retired Chief Justice of a High Court or a retired Judge of a High Court who has completed not less than five years of service as a Judge in High Court.

What is the difference between a Judicial Member and a Technical Member of the GSTAT as per CGST Section 109?

A Judicial Member is generally a person with a legal background, typically a retired Judge of a High Court or a person qualified to be a High Court Judge. A Technical Member is a person with expertise in technical matters related to taxation, such as a retired member of the Indian Revenue Service (Customs and Central Excise) or a retired officer of the State Government with experience in Commercial Tax. Section 109 details the specific qualifications for both.

Can a single-member bench be constituted in the GSTAT, and if so, under what circumstances according to CGST Section 109?

While CGST Section 109 primarily outlines the constitution of benches with multiple members, it doesn't explicitly prohibit single-member benches. The power to constitute benches and allocate cases to them rests with the President of the GSTAT. Therefore, depending on regulations and notifications issued based on the provisions of CGST Act, single member benches are a possibility, but not detailed in Section 109.

Where are the State Benches of the GSTAT located, and does CGST Section 109 specify their exact locations?

The State Benches of the GSTAT are located in each State. However, CGST Section 109 does not specify the exact locations of these benches. The central government, after consultation with the State Government, determines the locations for the State Benches via notification.

What powers does the President of the GSTAT have regarding the constitution of benches according to CGST Section 109?

The President of the GSTAT has the power to constitute benches, both at the Principal Bench and the State Benches. They also have the authority to assign cases to these benches based on factors such as the complexity of the case, the amount of tax involved, and any other relevant considerations. The President is responsible for the overall functioning and administration of the GSTAT. Section 109(11) also grants the President other general powers regarding the operation of the Tribunal.

What happens if there is a vacancy in the position of President or a member of the GSTAT as per CGST Section 109?

CGST Section 109 doesn't explicitly address vacancies. However, the law generally provides for the continuation of proceedings even with a vacancy, and mechanisms exist for appointing replacements in a timely manner to ensure the smooth functioning of the GSTAT based on separate rules and notifications.

Key Conditions & Requirements

Condition	Details
Establishment of Appellate Tribunal	The Government shall, on the recommendations of the Council, by notification, establish an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal.
Purpose of Appellate Tribunal	For hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority, or for conducting an examination or adjudicating the cases referred to in sub-section (2) of section 171, if so notified under the said section.
Principal Bench Location	The Government shall constitute a Principal Bench of the Appellate Tribunal at New Delhi.
Composition of Principal Bench	The Principal Bench shall consist of the President, a Judicial Member, a Technical Member (Centre) and a Technical Member (State).
Constitution of State Benches	On the request of the State, the Government may, by notification, constitute State Benches at such places and with such jurisdiction as may be recommended by the Council.
Composition of State Benches	State Benches shall consist of two Judicial Members, a Technical Member (Centre) and a Technical Member (State).
Jurisdiction of Principal Bench (Place of Supply)	Cases in which any one of the issues involved relates to the place of supply, shall be heard only by the Principal Bench.
Matters under Section 171(2)	The matters referred to in sub-section (2) of section 171 shall be examined or adjudicated only by the Principal Bench.

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Amendment History

Enforced w.e.f . 1st July, 2017.

123Superscript numbers in the text mark amended passages — click them to jump here. Click "↑ view in text" to jump back.

2023↑ view in text

Substituted ( w.e.f. 1st August, 2023 vide Notification No. 28/2023 - CT dated 31st July, 2023. ) by s. 149 of The Finance Act 2023 (No. 8 of 2023).

2024↑ view in text

Inserted by section 142 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024 .