The first sentence is right and the second sentence is wrong.

Taste is a copulative verb, but it is different from the be verb. Its negative sentences and interrogative sentences must be changed by the auxiliary verb do/does/did, and cannot be directly followed by it.

2.

Therefore, if you want to say "this dish (it) tastes bad", you must say:

1) it

no

taste

It's good.

2)It

taste

Bad/bad/terrible.