Santosh Prakash vs. The Union Of INDIA

CWJC/3006/2024HC PatnaGSTCNR BRHC01011572202419 February 2024Bench: MR. JUSTICE RAJIV ROY,THE CHIEF JUSTICE-4 pages

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Facts

The petitioner, Santosh Prakash, proprietor of M/s Zenith Enterprises, filed a writ petition before the Patna High Court. The petitioner sought 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 non-constitution of the Tribunal prevented the petitioner from filing the appeal and availing the benefit of 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 authorities acknowledged the non-constitution of the Tribunal and issued a notification (Order No. 09/2019-State Tax) stating that the period of limitation for filing an appeal would commence only after the constitution of the Tribunal and the President entering 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 amount of tax in dispute, in addition to any amount already deposited under Section 107(6). 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 related steps will be deemed stayed. The Court also directed that the petitioner must present/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 upon the Tribunal's constitution, the respondents would be at liberty to proceed. Additionally, upon compliance with the deposit, any attachment of the petitioner's bank account shall be released. The Court noted that whatever was previously deposited would be accounted for in determining the 20 percent to be paid.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay of recovery of the balance amount of tax under Section 112(9) of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal? The petitioner argued that they are being deprived of their statutory remedy due to the respondents' failure to constitute the Tribunal, and therefore, should be granted the benefit of stay upon depositing the prescribed pre-deposit. The petitioner relied on the principle that a litigant should not suffer due to the administrative inaction of the authorities. The revenue/state acknowledged the non-constitution of the Tribunal and had issued a notification to address the issue of limitation, indicating their awareness of the procedural impediment.

Sections Cited

Section 112, Section 107, Section 172

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Cause title — parties, addresses and appearances

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.3006 of 2024 ====================================================== Santosh Prakash S/o Ramakant Prasad, Resident at Nalanda Colony, Opolo burn Hospital, Dhanuki, P.S.-Agamkuan, District-Patna. Prop of M/S Zenith Enterprises, GSTIN No-10A JGPP3869B1ZH Head Office-Samrat (Petrol Pump), Mauza Pahari, Khata No. 40, Thana No. 15, Setu Road Plot No. -22p, Mahatma Gandhi, Patna, Pin code-800007, business office-M/s Zenith Enterprises @ Zenith Communication, Ist Floor, F-5 and F-6 Shyam Centre Exhibition Road, Patna-800001. ... ... Petitioner/s Versus 1. The Union of India through the Secretary, Department of Revenue, Ministry of Finance, North Block, New Delhi-110001. 2. The Commissioner of Customs Central GST and Central Excise Patna 2nd Floor C.R. Building (Annexe), Bihr Chand Patel Path, Patna-1, Bihar. 3. The Joint Commissioner (Appeal), CGST Patna Range, Patna, Bihar. 4. The Assistant Commissioner CGST and CX, Patna Central Division, Patna- 1, Bihar. 5. The Deputy /Assistant Commissioner, CGST and CX Central Division, Ground Floor, Chandpura Palace, Opp. Dadi Maa Temple, Bank Road, West Gandhi Maidan, Patna-800001. 6. The Commissioner Commercial Taxes Bihar, Vikash Bhawan, Patna. 7. The Superintendent CGST Patna Range, Patna, Bihar. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. Subodh Kumar, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST & CX Mr. Devansh Shankar Singh, Advocate ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE RAJIV ROY

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 19-02-2024 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) 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.

4/4 (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 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) ( Rajiv Roy, J) AFR/NAFR CAV DATE Uploading Date 20.02.2024 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.