M/S Likhitha Infrastructure Limited vs. The Union Of INDIA
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M/s Likhitha Infrastructure Limited (the petitioner) filed a writ petition before the Patna High Court seeking to avail the statutory remedy of appeal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act before the Appellate Tribunal. However, the Tribunal had not been constituted, preventing the petitioner from filing the appeal and consequently from availing the benefit of stay of recovery of the balance tax amount as provided under Section 112(8) and (9) of the B.G.S.T. Act. The State authorities had 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 period of limitation for filing an appeal would commence only after the constitution of the Tribunal and the President entering office. The petitioner had already deposited Rs. 8,56,938/- against the demand.
Held
The Court held that the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act, subject to the 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 Court reasoned that the petitioner cannot 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 in this regard were deemed to be stayed. The Court also noted that if the already recovered amount of Rs. 8,56,938/- satisfied the 20 percent requirement, no further deposit would be necessary for the stay. However, the Court stipulated that this stay would not 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 becomes 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 in accordance with law. The Court also directed the release of any attachment on the petitioner's bank account if the order is complied with and the requisite deposit is made. The issue of the exact quantum of tax in dispute was not explicitly decided, but the condition for stay was based on the remaining amount.
Key Issues
1. Whether the petitioner is entitled to the statutory benefit of stay of recovery of the balance amount of tax under Sub-Section (9) of Section 112 of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal? This issue turns on the interpretation of Section 112(8) and (9) of the B.G.S.T. Act and the implications of the respondents' failure to constitute the Tribunal. The petitioner argued that they are being deprived of their statutory remedy due to the respondents' inaction in constituting the Tribunal. They contended that they should not be prejudiced by this delay and should be granted the benefit of stay upon fulfilling the deposit requirements stipulated for stay. The respondents (Union of India and State authorities) acknowledged the non-constitution of the Tribunal and had issued a notification under Section 172 of the B.G.S.T. Act to address the difficulties arising from this situation. Their argument, implicitly, was that the statutory period of limitation and the associated benefits were contingent upon the Tribunal's functional status.
Sections Cited
Section 112, Section 107, Section 172
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Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 27-06-2024
The instant writ petition has been filed under Article 226 of the Constitution of India seeking multifarious reliefs.
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The petitioner essentially is desirous of availing statutory remedy of appeal against the impugned order 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 3/4 the case may be, of the Tribunal after its constitution under Section 109 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 State of Bihar & Others in C.W.J.C. No. 15465 of 2022. (ii) It is submitted by the petitioner that already Rs. 8,56,938/- has been recovered from the petitioner as against the demand. If that satisfies 20 per cent, then there shall be no requirement of further deposit as per this order for the purpose of stay of the recovery proceedings. (iii) 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 4/4 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. (iv) 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. (v) 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.
With the above liberty, observation and directions, the writ petition stands disposed of.
P.K.P./- (K. Vinod Chandran, CJ) (Harish Kumar, J) AFR/NAFR CAV DATE Uploading Date 27.06.2024 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.