M/S Shakti Infotech PVT. LTD. vs. The Union Of INDIA

Held

The Court held that the petitioner is entitled to the statutory benefit of a stay of recovery upon depositing ten per cent of the disputed tax amount, in addition to any amount already deposited under Section 107(6) of the Bihar Goods and Services Tax Act. The Court reasoned that the petitioner should not be deprived of the benefit of the reduced pre-deposit due to the respondents' failure to constitute the GST Tribunal. The recovery of the balance amount and any steps taken for it will be stayed. However, this stay is not open-ended. The petitioner must file their appeal under Section 112 of the Bihar Goods and Services Tax Act once the Tribunal is constituted and functional. If the petitioner fails to file the appeal within the stipulated period after the Tribunal's constitution, the respondent authorities will be at liberty to proceed according to law. The Court also directed the release of any attached bank accounts if the ten per cent deposit is made.

Facts

M/s Shakti Infotech Pvt. Ltd. (the petitioner) filed a writ petition before the Patna High Court. The petitioner sought a stay on the recovery of disputed tax amounts. The core of the issue revolved around the pre-deposit requirement for filing an appeal before the Goods and Services Tax (GST) Tribunal. An amendment to Section 112 of the Central Goods and Services Tax Act, 2017, reduced the pre-deposit from twenty per cent to ten per cent for maintaining an appeal before the Tribunal. However, the GST Tribunal had not yet been constituted. The Court had previously granted relief based on a judgment allowing a twenty per cent deposit until the Tribunal's constitution.

Key Issues

1. Whether the petitioner is entitled to a stay of recovery of the disputed tax amount, considering the amendment reducing the pre-deposit to ten per cent, despite the non-constitution of the GST Tribunal? The petitioner argued that the reduction in pre-deposit to ten per cent should be applied, and they should be granted a stay of recovery until the Tribunal is functional, as the delay in filing an appeal is due to the respondents' failure to constitute the Tribunal. The petitioner relied on the principle that they should not be prejudiced by the inaction of the authorities. The revenue/State did not record any specific arguments against this point, but their general stance would be to uphold the statutory pre-deposit requirements and recovery procedures.