Shashi Ranjan Kumar vs. Union Of INDIA
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The petitioner, Shashi Ranjan Kumar, a proprietary concern, 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 non-constitution of the Tribunal prevented 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 respondent State authorities acknowledged this issue 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. The petitioner sought relief from the High Court due to this procedural impediment.
Held
The Court held that the petitioner should 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 themselves. The recovery of the balance amount and any steps taken for recovery will be deemed to be stayed. The Court also directed that the petitioner must file their appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional, within a period to be specified upon its constitution. If the petitioner fails to file the appeal within the stipulated period after the Tribunal's constitution, the respondent authorities would be at liberty to proceed in accordance with law. The Court also ordered the release of any attached bank account of the petitioner upon compliance with the deposit requirement. The ratio is that statutory benefits cannot be denied due to administrative inaction in constituting statutory bodies, and a balance must be struck between the assessee's right to appeal and the revenue's interest.
Key Issues
1. Whether the petitioner is entitled to the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, in light of the respondents' own admission of this impediment? (Question of law) Petitioner's Arguments: The petitioner argued that they should not be deprived of the statutory benefit of stay on recovery of the balance tax amount due to the failure of the respondents to constitute the Appellate Tribunal. They contended that the notification issued by the State authorities under Section 172, which defers the limitation period, implicitly supports their claim for relief. They relied on a previous order of the High Court in a similar case, SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others. Revenue/State's Arguments: The judgment does not record any specific arguments made by the revenue or state authorities against the petitioner's claim for stay. However, their acknowledgment of the non-constitution of the Tribunal and the issuance of the removal of difficulties order suggests an implicit understanding of the procedural issue.
Sections Cited
Section 112, Section 172, Section 107, Section 109
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Cause title — parties, addresses and appearances
ORAL ORDER (Per: HONOURABLE THE CHIEF JUSTICE) 2 08-04-2024 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 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").
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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.
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 3/4 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 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 4/4 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. (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.
supratim/- (K. Vinod Chandran, CJ) (Harish Kumar, J) U
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.