M/S. Gtl Infrastructure Limited vs. The Good And Services Tax Network

CWJC/12304/2024HC PatnaGSTCNR BRHC01070056202427 August 2024Bench: MR. JUSTICE PARTHA SARTHY,THE CHIEF JUSTICE-5 pages

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Facts

M/s. GTL Infrastructure Limited (the petitioner) filed a writ petition before the Patna High Court seeking to avail the statutory remedy of appeal against certain orders before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act. The petitioner was unable to file the appeal due to the non-constitution of the Tribunal. This prevented them from availing the benefit of stay of recovery of the balance amount of tax, as provided under Section 112(8) and (9) of the B.G.S.T. Act, upon depositing the stipulated amounts. The respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification (Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019) under Section 172 of the B.G.S.T. Act, stating that the limitation period for filing appeals would commence only after the constitution of the Tribunal and the President entering office.

Held

The Court held that the petitioner cannot be deprived of the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act due to the non-constitution of the Tribunal by the respondents. The Court reasoned that the petitioner's right to seek a stay should not be hampered by the administrative failure of the respondents in constituting the Tribunal. Consequently, the recovery of the balance amount and any steps taken in this regard were deemed to be stayed. The Court directed that upon deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, in addition to any amount already deposited under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner would be entitled to the benefit of stay. The Court also clarified that this stay would not be open-ended and that 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. If the petitioner fails to file the appeal within the period specified upon the Tribunal's constitution, the respondents would be at liberty to proceed. The Court also ordered the release of any attached bank accounts of the petitioner if the 20 percent deposit is made. The ratio decidendi is that administrative delays in establishing statutory forums should not impede a taxpayer's right to statutory remedies, provided they comply with interim deposit requirements.

Key Issues

1. Whether the petitioner can be deprived of the statutory benefit of stay of recovery of the balance amount of tax under Section 112(8) and (9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondents? The petitioner argued that they are being prevented from exercising their statutory right of appeal and obtaining a stay on recovery solely because the Tribunal has not been constituted by the respondents. They contended that this inaction on the part of the respondents should not prejudice their right to seek a stay on recovery, especially when they are willing to comply with the deposit requirements stipulated in Section 112(8). The petitioner relied on the principle that a litigant should not suffer due to the administrative failure of the State. The respondents did not record any specific arguments against this contention, but their actions and the notification indicated an acknowledgment of the situation.

Sections Cited

Section 112, Section 107, Section 172

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.12304 of 2024 ====================================================== M/S. GTL Infrastructure Limited a company within the meaning of section 2 (20) of the Comapnies Act, 2013, having its Registered Office at D/s-20, 3rd Floor, Markandey Complex, Gayatri Mandir Road, Kankarbagh, Patna, Bihar, through its General Manager cum Authorised Signatory Dharam Nath Jha, Son of late Mahendra Jha, aged about 54 years, resident of Village- Bishanpur, P.O. and P.S. - Phulpras, Town and District- Mahdubani, Bihar. ... ... Petitioner/s Versus 1. The Good and Services Tax Network represented by its Chairman having its Office at 4th Floor, East Wing, World Mark- 1, Aerocity, Indra Gandhi International Airport, New Delhi- 110037, P.O. and P.S. Central Secretariat, District- Delhi, New Delhi. 2. Union of India, through the Chief Commissioner, Central GST and Central Excise, having his office at 3rd Floor, Central Revenue Building (Annexe), Birchand Patel Path, Patna. 3. The Additional Commissioner (Appeals), CGST and Central Excise, Appeals, Patna having his office at 2nd Floor , C.R. Building (Annexe), Bir Chand Patel Path, Patna. 4. Deputy/Assistant Commisioner, CGST and Central Excise, Patna ( Central) Division, having his office at Ground Floor, Chandpura Palace, opp, Dadi Maa Temple, Bank Road, West Gandhi Maidan, Patna. 5. The Commissioner, Commercial Taxes, Bihar, having his office at Vikash Bhawan, Patna- 800015. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr.Navin Kumar Singh, Advocate For the Respondent/s : Dr. Krishna Nandan Singh (ASG) Mr. Anshuman Singh Sr. SC, CGST&CX Mr. Devansh Shankar Singh JC to ASG Mr. Harsh Ajay Singh, JC to ASG ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHY

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 27-08-2024 The instant writ petition has been filed under Article 226 of the Constitution of India seeking multifarious reliefs.

2/5

The petitioner essentially is desirous of availing statutory remedy of appeal against the impugned orders before the Appellate Tribunal (hereinafter referred to as "Tribunal") under Section 112 of the Bihar Goods and Services Tax Act (hereinafter referred to as "B.G.S.T. Act").

However, due to non-constitution of the Tribunal, the petitioner is deprived of his statutory remedy under Sub-Section (8) and Sub-Section (9) of Section 112 of the B.G.S.T. Act.

Under the circumstances, the petitioner is also prevented from availing the benefit of stay of recovery of balance amount of tax in terms of Section 112 (8) and (9) of the B.G.S.T Act upon deposit of the amounts as contemplated under Sub-section (8) of Section 112. 5. The respondent State authorities have acknowledged the fact of non-constitution of the Tribunal and come out with a notification bearing Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019 for removal of difficulties, in exercise of powers under Section 172 of the B.G.S.T Act, which provides that period of limitation for the purpose of preferring an appeal before the Tribunal under Section 112 shall start only after the date on which the President, or the State President, as the case may be, of the Tribunal after its constitution under Section 109 3/5 of the B.G.S.T Act, enters office.

This Court is, therefore, inclined to dispose of the instant writ petition in the following terms:- (i) Subject to deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act. The petitioner cannot be deprived of the benefit, due to non- constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed. It is not in dispute that similar relief has been granted by this Court in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others in C.W.J.C. No. 15465 of 2022. (ii) The statutory relief of stay, on deposit of the statutory amount, however in the opinion of this Court, cannot be open ended. For balancing the equities, therefore, the Court is of the opinion that 4/5 since order is being passed due to non-constitution of the Tribunal by the respondent-Authorities, the petitioner would be required to present/file his appeal under Section 112 of the B.G.S.T. Act, once the Tribunal is constituted and made functional and the President or the State President may enter office. The appeal would be required to be filed observing the statutory requirements after coming into existence of the Tribunal, for facilitating consideration of the appeal. (iii) In case the petitioner chooses not to avail the remedy of appeal by filing any appeal under Section 112 of the B.G.S.T. Act before the Tribunal within the period which may be specified upon constitution of the Tribunal, the respondent- Authorities would be at liberty to proceed further in the matter, in accordance with law. (iv) If the above order is complied with and a sum equivalent to 20 per cent of the remaining amount of the tax in dispute is paid then, if there is any attachment of the bank account of the petitioner pursuant to the demand, the same shall be released.

5/5 (v) Whatever has been deposited, would be given account in determining the 20 per cent directed to be paid herein.

With the above liberty, observation and directions, the writ petition stands disposed of.

ranjan/- (K. Vinod Chandran, CJ) (Partha Sarthy, J) AFR/NAFR NAFR CAV DATE NA Uploading Date 27.08.2024. Transmission Date NA

Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.