M/S Maa Sunaina Construction Private Limited vs. The Union Of INDIA

Held

The Court held that the petitioner is entitled to the statutory benefit of a stay of recovery, subject to depositing ten percent of the amount of tax in dispute, in addition to any amount already deposited under Sub-Section (6) of Section 107 of the Bihar Goods and Services Tax Act. The Court reasoned that the petitioner should not be deprived of this benefit due to the respondents' failure to constitute the GST Tribunal. The recovery of the balance amount and any steps taken towards it were deemed stayed. However, the Court clarified that this stay cannot be open-ended. The petitioner would be required to file their appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional, within a specified period. If the petitioner fails to file the appeal within the stipulated time after the Tribunal's constitution, the respondent authorities would be at liberty to proceed according to law. The Court also directed the release of any attachment on the petitioner's bank account if the ten percent deposit is made.

Facts

The petitioner, M/s Maa Sunaina Construction Private Limited, approached the Patna High Court through a writ petition. The core 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 percent to ten percent. However, this amendment was effective from November 1, 2024. The GST Tribunals had not yet been constituted. The petitioner sought a stay on recovery of the disputed tax amount, referencing previous orders of the High Court that allowed a twenty percent deposit and stay of recovery until the Tribunal was constituted. The court noted the admitted position that Tribunals were not constituted and no appeal could be filed before November 1, 2024.

Key Issues

1. Whether the petitioner is entitled to a stay of recovery of the disputed tax amount upon depositing ten percent of the tax in dispute, given the non-constitution of the GST Tribunal and the impending effective date of the amended pre-deposit provision? Petitioner's contention: The petitioner argued that due to the non-constitution of the GST Tribunal, they are unable to file an appeal. They relied on previous High Court judgments (e.g., SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others) that allowed a twenty percent deposit and stay of recovery. They contended that the reduction in pre-deposit to ten percent, effective from November 1, 2024, should be applied to their case, as they cannot file an appeal before that date due to the Tribunal's non-existence. They sought the benefit of stay of recovery. Revenue/State's contention: The judgment does not record any specific arguments made by the respondents (Union of India and State of Bihar).