M/S Hindustan Construction Company LTD. vs. The Union Of INDIA

Held

The Court held that the petitioner should be extended 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 related steps were deemed stayed. However, the Court also held that this relief cannot be open-ended. The petitioner would be required to 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 the appeal within the stipulated period 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. The Court noted that if more than 20 percent of the demand has already been paid, the stay of recovery would continue until the Tribunal is constituted and, if an appeal is filed within the stipulated period, until its disposal.

Facts

M/s Hindustan Construction Company Ltd. (the petitioner) filed a writ petition before the Patna High Court challenging an order. The petitioner's primary grievance was the inability to avail the statutory remedy of appeal before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act due to the non-constitution of the Tribunal. This prevented the petitioner from obtaining a stay on the recovery of the balance tax amount, as contemplated under Section 112(8) and (9) of the B.G.S.T. Act, upon depositing a specified portion of the disputed tax. The respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification (Order No. 09/2019-State Tax) to address such difficulties, stipulating that the limitation period for filing appeals would commence only after the Tribunal's constitution and the President's assumption of office.

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, by depositing 20 percent of the remaining disputed tax, in addition to amounts already deposited at the first appellate stage. Petitioner's Argument: The petitioner argued that they are being deprived of their statutory remedy and the consequential benefit of stay due to the respondents' failure to constitute the Tribunal. They contended that they should be granted the stay upon fulfilling the deposit requirements as stipulated for availing the stay under Section 112(9), referencing a previous High Court order in a similar case (SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others). Revenue/State's Argument: The judgment does not record specific arguments from the respondent State authorities regarding the petitioner's entitlement to the stay. However, the respondents acknowledged the non-constitution of the Tribunal and issued a notification under Section 172 of the B.G.S.T. Act to address the delay in filing appeals.