M/S Dharmendra Kumar vs. The Union Of INDIA
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The petitioner, M/s Dharmendra Kumar, 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 Act (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 a stay on the recovery of the balance amount of tax, which is contingent upon depositing a specified portion of the disputed tax and filing an appeal 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 under Section 172 of the B.G.S.T. Act, which stated 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 under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Tribunal. The Court reasoned that the respondents themselves are responsible for the delay in the constitution of the Tribunal, and therefore, the petitioner should not suffer. The Court directed that subject to the deposit of 20 percent of the remaining amount of tax in dispute (in addition to any amount already deposited under Section 107(6)), the petitioner would be extended the benefit of stay under Section 112(9). Recovery of the balance amount and any steps taken would be stayed. The Court also clarified that this relief is not open-ended and the petitioner must file their appeal under Section 112 once the Tribunal is constituted and functional. If the petitioner fails to file the appeal within the specified period 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. 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 can be deprived of the statutory benefit of stay under Section 112(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 availing a statutory remedy by the respondents' failure to constitute the Tribunal. They contended that the benefit of stay, which is linked to the appeal process, should not be denied due to administrative inaction. The petitioner relied on the principle that a party should not suffer due to the fault of the authorities. The revenue or State did not record any specific argument against this point, but their actions and the notification issued implicitly suggested a reliance on the existing statutory framework. 2. Whether the Court can grant interim relief in the form of a stay of recovery pending the constitution of the Tribunal? The petitioner sought a stay of recovery of the balance tax amount. The Court considered the balance of equities and the petitioner's inability to pursue their statutory appeal.
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 : 03-04-2024 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 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. (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.
sharun/- (K. Vinod Chandran, CJ) ( Arvind Srivastava, J) AFR/NAFR CAV DATE Uploading Date 04.04.2024 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.