Naveen Kumar vs. The Union Of INDIA
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The petitioner, Naveen Kumar, filed a writ petition before the Patna High Court seeking to avail the statutory remedy of appeal under Section 112 of the Bihar Goods and Services Tax (BGST) Act. However, the Appellate Tribunal, which is the forum for such appeals, had not been constituted. This non-constitution prevented the petitioner from filing an appeal and consequently from availing the benefit of a stay on the recovery of the balance tax amount, as provided under Section 112(8) and (9) of the BGST Act, upon depositing a specified portion of the disputed tax. The State authorities acknowledged the non-constitution of the Tribunal and issued a notification under Section 172 of the BGST Act, stating that the limitation period for filing appeals 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 BGST Act due to the non-constitution of the Tribunal by the respondents. The Court reasoned that it would be unjust to penalize the petitioner for an administrative failure. 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 Section 107(6) of the BGST Act, the statutory benefit of stay under Section 112(9) shall be extended. The recovery of the balance amount and any steps taken for it would be deemed stayed. The Court also stipulated that this relief is not open-ended; the petitioner must file their appeal under Section 112 of the BGST 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 on the petitioner's bank account if the 20 percent deposit is made.
Key Issues
1. Whether the petitioner can be deprived of the statutory benefit of stay under Section 112(9) of the BGST Act due to the non-constitution of the Appellate Tribunal by the respondents? (Question of law). Petitioner's Arguments: The petitioner argued that they are being prevented from exercising their statutory right to appeal and obtain a stay on recovery solely because the Tribunal has not been constituted by the respondents. They contended that they should not suffer due to the inaction of the authorities responsible for setting up the appellate mechanism. They relied on the principle that a litigant should not be prejudiced by the administrative failure of the state. Revenue/State's Arguments: The respondent authorities acknowledged the non-constitution of the Tribunal and had issued a notification under Section 172 of the BGST Act to address the situation. While not explicitly arguing against the petitioner's right to relief, their actions indicated an attempt to manage the situation arising from the non-functional Tribunal. They did not dispute the petitioner's claim of being unable to file an appeal.
Sections Cited
Section 112, Section 107, Section 172, Section 109
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ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 09-01-2024
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 2/4 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 the case may be, of the Tribunal after its constitution under 3/4 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. (iii) In case the petitioner chooses not to avail the remedy of appeal by filing any appeal under 4/4 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.
sharun/- (K. Vinod Chandran, CJ) ( Rajiv Roy, J) AFR/NAFR NAFR CAV DATE Uploading Date 10.01.2024 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.