Fork in the Road: The curious case of Bifurcated Jurisdiction in Indirect Tax Appellate Structure in India

Abstract

Justice dispensation system envisages a formal structure of adjudication, appeal, review, revision, etc. to ensure probity and fair balance in the mechanism for determination of rights and liabilities of the parties. It is, thus, necessary that the justice dispensation system provides seamless mechanism to the parties concerned to be able to identify the forum where they should ventilate their grievances and seek enforcement of rights. To this end, the statutory provisions unreservedly identify the adjudicating authority, the appellate forums, etc. The attendant procedures and conditionalities to be observed by such forums are also set out in the statute itself. There is no difference in this generic statutory scheme in the fiscal context with taxing statutes providing similarly.

There is a peculiarity, however, in the appellate structure under the key indirect tax laws. They appear to follow a scheme of bifurcated jurisdiction wherein instead of providing a seamless appellate route the appellate jurisdiction is bifurcated into different forums, so much so that appeals against one forums vest with different forums. Even though this scheme has been prevailing for decades, experience reveals that such bifurcation results into unavoidable confusion amongst the litigants, as regards identification of the appellate forums. It also adds further burden on the already strained judicial dispensation system by requiring the courts to test the maintainability for each appeal specifically and individually. This article sketches the statutory appellate scheme under the key indirect tax laws, which provide for such bifurcated jurisdiction and encapsulates the attendant consequences of the scheme.

Keywords: Appeal, Appellate Structure, Indirect Tax, Judicial Review

JEL Classification: H25, K34