Business Laws

Birthing an unbiased GST tribunal

G Natarajan | Updated on: Jul 03, 2022
For and against: In a three-member GST tribunal, if two technical members concur on an issue, they would prevail even if the judicial member dissents (file image)

For and against: In a three-member GST tribunal, if two technical members concur on an issue, they would prevail even if the judicial member dissents (file image) | Photo Credit: new_cox

Why it would pay to emulate the unique voting pattern of the GST council

One issue related to the Goods and Services Tax (GST) that defies solution even after five years is the inability to form the GST tribunal. And when it finally comes into existence, the tribunal would be obese at birth, with a huge pile-up of cases.

The major hurdle to its formation is its constitution. Both Central and State Governments want their officers as technical members in each bench; and with another judicial member it becomes a three-member body. It is a common belief that the technical members could be biased in favour of the revenue arm; in a three-member body, if two technical members concur on an issue, their view would prevail even if the judicial member dissents.

As justice should not only be done but also seen to be done, it is imperative that any such notion is dispelled.

Such a constitution of the tribunal has been deemed flawed by the Madras High Court in the case of Revenue Bar Association vs UOI.

One easy way out could be to have a two-member tribunal, with a judicial and a technical member each, who can be from either the Central or State government, and selected from a panel of technical members.

But this option does not find favour, as the Centre and State governments both want their officers present in all the benches of the tribunal. Having two judicial members would make the tribunal too unwieldy, besides the uncertainty over finding enough eligible persons willing to take up the position.

The GST council is a unique federal body created by the Constitution, which has been doing a phenomenal job from the start. The voting pattern of the council is unique, where the value of the Central government’s vote is 33 per cent and that of the State governments is 67 per cent, and any decision requires 75 per cent votes.

Neither the Central government alone, nor all the State governments together can pass any resolution in the GST Council.

Why not introduce this voting methodology in the GST tribunal? To elaborate, let the decision of the judicial member have a weightage of 50 per cent, and that of each technical member be 25 per cent, with any decision calling for 75 per cent approval. Even if the two technical members concur, it cannot become a verdict. And, the view of the judicial member would prevail only if at least one technical member concurs.

To bring this about the statutory provisions dealing with the tribunal’s set-up must prescribe a procedure where one of the three members shall frame the issues and record his decisions, followed by the other two members recording their respective decisions and the reasons for it; the final verdict would be based on the collective weightage of their decisions.

The writer is a Chennai-based advocate

Published on July 03, 2022
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