In a move that will help taxpayers till the GST Tribunal is set up, the Bombay High Court has said they can get relief from recovery proceedings if they file a declaration of intent to appeal against the order of the revenue authorities.

If such a declaration is filed, the taxpayer should be given 15-day period to do so before tax authorities initiate recovery proceedings against them, the court said.

The ruling comes on a set of writ petitions seeking to invoke Article 226 of the Constitution on the ground that though the statute provides an appeal to an Appellate Tribunal under the State Good and Services Tax Act, it has not been constituted. A challenge was also raised to the validity of statutory provisions.

“These two measures, according to us, will substantially reduce the litigation which has arisen due to the non-constitution of the GST Tribunal,” said the division bench of Justices Abhay Ahuja and Nitin Jamdar in their ruling. For the ruling, the court interpreted a Maharashtra state tax circular on this issue.

Experts welcomed the ruling and said it would reduce writ petitions and also fear of recoveries in absence of the GST Tribunal. Abhishek Jain, partner, indirect tax, KPMG, in India, said, “This order will help streamline the process flow and help avoid disputes between the taxpayers and the department till the time the GST Tribunal is set up. Similar guidelines may be considered to be issued for PAN India level by the government to reduce confusion in the interim period.”

The ruling assumes importance given the large number of disputes pending between taxpayers and GST authorities, as the GST Tribunal is yet to be set up even five years after the indirect tax levy was introduced. The GST Council, chaired by Union finance minister Nirmala Sitharaman, had in its last meeting adopted the report on GST Tribunals and it is expected that the amendments for this will be passed in the second half of the Budget session of Parliament. Tax authorities are hopeful that the tribunals will be functional by the end of this year.

Under the GST law, taxpayers can appeal against orders of the assessing officers to the commissioner (appeals). Any appeal beyond this has to be filed with the GST Tribunal. However, as there is no tribunal at present, these cases are taken up by the high courts.