M/S A.N. Enterprises vs. Union Of INDIA

CWJC/4643/2023HC PatnaGSTCNR BRHC01019697202325 January 2024Bench: MR. JUSTICE RAJIV ROY,THE CHIEF JUSTICE-4 pages

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Facts

M/s A.N. Enterprises (the petitioner) filed a writ petition seeking to avail the statutory remedy of appeal against an order 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 Appellate Tribunal. This prevented the petitioner 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 the non-constitution of the Tribunal and 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 President of the Tribunal entered 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 a sum equal to 20 percent of the remaining amount of tax in dispute, in addition to any amount already deposited under Section 107(6) of the B.G.S.T. Act. The Court reasoned that the petitioner should not suffer due to the non-constitution of the Tribunal by the respondents. The recovery of the balance amount and any related steps would be stayed. The Court also directed 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 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 according to law. The Court also ordered the release of any attachment on the petitioner's bank account if the 20 percent deposit is made.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, by depositing 20 percent of the remaining disputed tax amount? The petitioner argued that they should not be deprived of this statutory benefit due to the respondents' failure to constitute the Tribunal. The petitioner relied on a previous order of the High Court in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others. The respondents did not record any specific arguments against this point, but their actions led to the non-constitution of the Tribunal. 2. What is the appropriate course of action to balance equities and ensure that the petitioner eventually files their appeal once the Tribunal is constituted? The petitioner sought directions from the Court to address the situation arising from the non-functional Tribunal. The respondents' actions, specifically the notification under Section 172, indicated an attempt to manage the situation but did not provide a direct solution for the petitioner's immediate predicament.

Sections Cited

Section 112, Section 107, Section 172, Section 109

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.4643 of 2023 ====================================================== M/s A.N. Enterprises through its Proprietor Md. Shaukat Noori, Male, aged About-67 Years, S/o Ajmal Noori, Resident at Gandhi Path, Ward No.-8, Kahare, P.S.-Saharsa, District-Saharsa,Saharsa, Bihar-852201. ... ... Petitioner/s Versus 1. Union of India through the Secretary (revenue), Ministry of Finance, Government of India, North Block, New Delhi-110001. 2. The Goods and Services Tax Council, through its Secretary, 5th Floor, Tower II, Jeevan Bharati Building, Janpath Road, Cannaught Place, New Delhi- 110001. 3. The State of Bihar through its Secretary, Commercial Tax Department, Vikas Bhawan, Bailey Road, Patna-800001. 4. The Commissioner of Central GST and Central Excise, Patna-I, 3rd Floor, Kendriya Rajaswa Bhawan (Annexe Building), Bir Chand Patel Patna- 800001. 5. The Commissioner, Bihar Commercial Tax Department, Government of Bihar, Vikas Bhawan, Bailey Road, Patna-800001. 6. The Additional Commissioner (Appeal), Bihar State GST, Purnia Division, Purnea. 7. The Assistant Commisioner, Bihar State GST, Jurisdiction-Saharsa, Purnia, Bihar. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr.Amit Pandey, Advocate For the UOI : Dr. K.N. Singh, ASG Mr. Anshuman Singh, Sr. SC, CGST & CX For the State : Mr. Vivek Prasad, GP-7 ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE RAJIV ROY

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 25-01-2024 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.

With the above liberty, observation and directions, the writ petition stands disposed of.

Anushka/- (K. Vinod Chandran, CJ) ( Rajiv Roy, J) AFR/NAFR CAV DATE Uploading Date 26.01.2024 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.