M/S Medlife Wellness Retail PVT. LTD. vs. The Union Of INDIA
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M/s Medlife Wellness Retail Pvt. Ltd. (the petitioner) 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 (B.G.S.T.) Act. The petitioner was unable to file the appeal due to the non-constitution of the Tribunal. This prevented them 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. The respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification under Section 172 of the B.G.S.T. Act, stating that the period of limitation for preferring an appeal would commence only after the Tribunal's constitution and the President's entry into office.
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 Section 107(6) 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. The recovery of the balance amount and any related steps would be deemed stayed. However, the Court also held that this relief cannot be open-ended. To balance equities, 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 avail this remedy within the period specified upon the Tribunal's constitution, the respondents would be at liberty to proceed in accordance with law. The Court did not expressly leave any issue undecided.
Key Issues
1. Whether the petitioner can be extended 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 a specified portion of the disputed tax amount? The petitioner argued that they are being deprived of a statutory benefit due to the respondents' failure to constitute the Tribunal. The revenue/State did not record any specific argument against this point, but implicitly acknowledged the situation by issuing the removal of difficulties notification. 2. Whether the stay of recovery should be open-ended, or if there should be a condition for the petitioner to file their appeal once the Tribunal is constituted? The petitioner sought the stay to enable them to pursue their appeal. The Court considered the need to balance equities due to the delay caused by the non-constitution of the Tribunal.
Sections Cited
Section 112, Section 107, Section 172, Section 109
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Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 19-05-2023 The instant writ petition has been filed under Article 226 of the Constitution of India seeking multifarious reliefs.
The petitioner essentially is desirous of 2/4 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 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 of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard, will thus be deemed to be stayed. It is not in dispute that similar relief has been granted by this Court in the case of SAJ Food Products Pvt. Ltd. vs. The 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.
With the above liberty, observation and directions, the writ petition stands disposed of.
Sujit/- (K. Vinod Chandran, CJ) ( Madhuresh Prasad, J) AFR/NAFR NAFR CAV DATE Uploading Date 19.05.2023 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.