Kalpana Medical Hall vs. The Union Of INDIA

CWJC/9999/2024HC PatnaGSTCNR BRHC01060572202402 July 2024Bench: MR. JUSTICE PARTHA SARTHY,THE CHIEF JUSTICE-4 pages

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Facts

The petitioner, Kalpana Medical Hall, filed a writ petition seeking to avail the statutory remedy of appeal before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act. However, the Tribunal had not been constituted, preventing the petitioner from filing an appeal and consequently from obtaining a stay on the recovery of the balance tax amount, as provided under Section 112(8) and (9) of the B.G.S.T. Act. 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 entry of the President or State President into office.

Held

The Court held that the petitioner should be extended the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act, subject to the deposit of 20 percent of the remaining disputed tax amount, in addition to any amount already deposited under Section 107(6) of the B.G.S.T. Act. The Court reasoned that the petitioner should not be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. The recovery of the balance amount and any steps taken for it would be deemed stayed. However, the Court also held that this relief of stay cannot be open-ended. To balance equities, 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 an appeal within the period specified after the Tribunal's constitution, the respondent authorities would be at liberty to proceed in accordance with law. The Court noted that similar relief was granted in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, considering the respondents' role in this delay? Petitioner's argument: The petitioner contended that they are being deprived of their statutory remedy of appeal and the consequential benefit of a stay on recovery due to the respondents' failure to constitute the Tribunal. They argued that they should not suffer due to the inaction of the authorities. Revenue/State's argument: The judgment does not record any specific argument from the respondent State authorities regarding this issue, other than their acknowledgment of the non-constitution of the Tribunal and the subsequent notification issued. 2. Whether the relief of stay of recovery, granted due to the non-constitution of the Tribunal, should be open-ended, or if there should be a time limit for filing the appeal once the Tribunal is functional? Petitioner's argument: Not explicitly recorded, but impliedly seeking the stay until their appeal is heard. Revenue/State's argument: Not explicitly recorded.

Sections Cited

Section 112, Section 107, Section 172, Section 109

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.9999 of 2024 ====================================================== Kalpana Medical Hall a proprietary concern having its place of business at Benta Chowk, Laheriasarai, Darbhanga- 846003, through its authorized representative Md. Aftab Alam male aged about 48 years, son of Ataur Rahman Ansari, resident of Benta Chowk, Ahila, P.O.- DMC, Laheriasarai, Darbhanga - 846003. ... ... Petitioner/s Versus 1. The Union of India through the Secretary, Ministry of Finance, Government of India at New Delhi. 2. The Principal Chief Commissioner of Central GST and CX, Central Revenue Building, Birchand Patel Path, Patna. 3. The State of Bihar, through the Principal Secretary cum Commissioner, Department of State Taxes, Government of Bihar, Patna. 4. The Assistant Commissioner of State Taxes, Darbhanga Circle - 1, Darbhanga. 5. The Additional Commissioner of State Taxes (Appeals), Darbhanga Division, Darbhanga. (2018 - 2019). ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. Gautam Kumar Kejriwal, Advocate Mr. Alok Kumar Jha, Advocate Mr. Akash Kumar, Advocate Mr. Aditya Raman, Advocate For the Respondent/s : Dr. K.N. Singh, ASG Mr. Anshuman Singh, Sr. SC. CGST & CX Mr. Amarjeet, AC to ASG Mr. Vikash Kumar, SC-11 ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHY

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 02-07-2024 The instant writ petition has been filed under Article 226 of the Constitution of India seeking multifarious reliefs.

The petitioner essentially is desirous of availing statutory remedy of appeal against the impugned order before 2/4 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 of the B.G.S.T Act, enters office.

3/4

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 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 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 4/4 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.

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

aditya/- (K. Vinod Chandran, CJ) ( Partha Sarthy, J) AFR/NAFR CAV DATE Uploading Date 02.07.2024. Transmission Date

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.