M/S Shiv Enterprises vs. The Union Of INDIA

Held

The Court held that the petitioner is entitled to 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 in this regard were deemed to be stayed. The Court also directed that 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, observing statutory requirements. If the petitioner fails to file the appeal within the period specified upon constitution of the Tribunal, the respondent authorities would be at liberty to proceed in accordance with law. Furthermore, upon compliance with the deposit order, any attachment of the petitioner's bank account pursuant to the demand shall be released. The Court relied on a previous order in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Facts

The petitioner, M/s Shiv Enterprises, filed a writ petition before the Patna High Court 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 Tribunal. This prevented the petitioner from availing the benefit of stay of recovery of the balance amount of tax, as contemplated under Section 112(8) and (9) of the B.G.S.T. Act, upon deposit of the required amounts. 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 constitution of the Tribunal and the entry of the President or State President into office.

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, upon depositing 20 percent of the remaining amount of tax in dispute? Petitioner's Contention: The petitioner argued that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay of recovery due to the respondents' failure to constitute the Tribunal. They contended that they should not be prejudiced by this administrative inaction and should be granted the stay upon fulfilling the deposit requirements as stipulated for availing the stay benefit under Section 112(8) and (9). Revenue/State's Contention: The respondent State authorities acknowledged the non-constitution of the Tribunal and had issued a notification under Section 172 of the B.G.S.T. Act to address the issue of limitation. While not explicitly arguing against the stay, their actions and the notification indicated a procedural framework for dealing with appeals post-constitution of the Tribunal.