M/S Shree Ganpati Traders vs. The Union Of INDIA
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M/s Shree Ganpati Traders, the petitioner, 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 petitioner was unable to file the appeal due to the non-constitution of the Tribunal. This prevented the petitioner from availing the benefit of stay of recovery of the balance tax amount, which is contingent upon depositing certain amounts as per Section 112(8) of the B.G.S.T. Act. The respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification 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 President of the Tribunal entered office.
Held
The Court held that the petitioner cannot be deprived of 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 due to the non-constitution of the Tribunal by the respondents. The Court reasoned that it would be inequitable to penalize the petitioner for a situation caused by the respondents' own failure to establish the statutory forum. Therefore, the Court directed that upon the petitioner depositing 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 statutory benefit of stay under Sub-Section (9) of Section 112 shall be extended. The recovery of the balance amount and any steps taken for recovery will be deemed stayed. The Court also clarified that this relief cannot be open-ended. The petitioner would be required to present 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 after the Tribunal's constitution, the respondents would be at liberty to proceed. The Court also directed the release of any attachment of the petitioner's bank account upon compliance with the deposit requirement.
Key Issues
1. Whether the petitioner can be deprived of the statutory benefit of stay of recovery of balance tax amount under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondents? (Question of law) 2. Whether the petitioner is entitled to a stay of recovery of the balance amount of tax upon depositing 20 percent of the disputed tax, in addition to amounts already deposited under Section 107(6) of the B.G.S.T. Act, given the non-functional status of the Tribunal? (Question of mixed law and fact) Petitioner's arguments: The petitioner argued that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay of recovery solely due to the failure of the respondents to constitute the Appellate Tribunal. They contended that they should not suffer due to the inaction of the authorities. They relied on the principle that a litigant should not be prejudiced by the delay or inaction of the State. The petitioner also referred to a similar relief granted in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others. Revenue/State's arguments: The respondent 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 issue of limitation. They did not contest the petitioner's claim for relief arising from the non-constitution of the Tribunal.
Sections Cited
Section 112, Section 107, Section 172, Section 109
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Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 26-06-2024
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 2/4 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 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. (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.
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.