Star Build Max PVT. Limited, Balua Tal, Motihari, District East Champaran vs. The Union Of INDIA
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The petitioner, Star Build Max Pvt. Limited, challenged an assessment order passed under Section 73 of the Bihar Goods and Services Tax Act, 2017 (BGST Act). The primary contention was that the statutory 30-day notice period was not provided. The petitioner had filed an appeal against the assessment order, which was dismissed on merits. However, the issue of insufficient notice was not raised before the appellate authority. The petitioner then filed a writ petition before the High Court, arguing that the assessment order was ex parte. The petitioner also sought to avail the statutory remedy of appeal before the Appellate Tribunal under Section 112 of the BGST Act but was unable to do so due to the non-constitution of the Tribunal. The State authorities had issued a notification acknowledging this difficulty and providing that the limitation period for appeal would commence after the Tribunal's constitution.
Held
The Court held that the petitioner is estopped from raising the contention of insufficient notice under Section 73 of the BGST Act in the present writ petition. This is based on Section 160(2) of the BGST Act, which states that the service of any notice shall not be called in question if it has been acted upon or not challenged in earlier proceedings. Since the petitioner did not raise this issue before the Assessing Officer or in the appeal, they cannot raise it now. Regarding the non-constitution of the Tribunal, the Court held that the petitioner should be extended the statutory benefit of stay under Section 112(9) of the BGST Act, subject to the deposit of 20 percent of the remaining amount of tax in dispute, in addition to any amount already deposited under Section 107(6). The Court reasoned that the petitioner should not be deprived of this benefit due to the respondents' failure to constitute the Tribunal. However, this stay is not open-ended; the petitioner must file their appeal under Section 112 once the Tribunal is constituted and functional. If the petitioner fails to file an appeal within the specified period after the Tribunal's constitution, the authorities can proceed according to law. The Court relied on a previous order in SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.
Key Issues
1. Whether the petitioner is estopped from raising the contention of insufficient notice (30 days) under Section 73 of the BGST Act in the present writ petition, having failed to raise it before the Assessing Officer or in the earlier appeal proceedings? 2. Whether the petitioner is entitled to the statutory benefit of stay of recovery under Section 112(9) of the BGST Act, despite the non-constitution of the Appellate Tribunal, and if so, on what conditions? Petitioner's arguments: The petitioner contended that the assessment order was ex parte, and this did not preclude them from raising the issue of insufficient notice before the Appellate Authority. They further argued that due to the non-constitution of the Appellate Tribunal, they were deprived of their statutory remedy of appeal and the consequential benefit of stay of recovery under Section 112(8) and (9) of the BGST Act. They relied on the State's notification for removal of difficulties. Revenue's arguments: The revenue, through its counsel, argued that Section 160(2) of the BGST Act prevents the service of notice from being questioned if it has been acted upon or not challenged in earlier proceedings. They implicitly supported the dismissal of the appeal on merits and the petitioner's failure to raise the notice issue earlier.
Sections Cited
Section 73, Section 160(2), Section 112, Section 112(8), Section 112(9), Section 107(6), Section 172, Section 109
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 11-05-2023 Petitioner is concerned with the order passed in assessment under Section 73 of the Bihar Goods and Services Tax Act, 2017 (for brevity “the BGST Act”) and the specific contention raised is that there was no notice granted of thirty days which is a statutory requirement as per Section 73. The 2/5 petitioner had filed an appeal which was also dismissed on merits. However, this contention was not raised before the Appellate Authority. Since, it is a question of insufficiency of notice, it ought to have been raised before the Assessing Officer itself. We are of the opinion that Section 160(2) of the BGST Act stands against the petitioner. We extract sub-section (2) of Section 160 hereunder:- “(2) The service of any notice, order or communication shall not be called in question, if the notice, order or communication, as the case may be, has already been acted upon by the person to whom it is issued or where such service has not been called in question at or in the earlier proceedings commenced, continued or finalised pursuant to such notice, order or communication.” The petitioner having not raised the issue before the Assessing Officer who issued such notice and also having not raised it in appeal is estopped from raising it in the present writ petition. Learned counsel for the petitioner submits that the assessment order was ex parte but, however, that does not preclude him from having raised the contention before the Appellate Authority. It was also ex parte, only because the 3/5 assessee did not turn up for hearing. Sub-section (2) of Section 160 of the BGST Act specifically stands against the contention raised in the writ petition. We are not inclined to permit such contention to be raised herein. Learned counsel for the petitioner then submits that the petitioner 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. 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 4/5 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 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- 5/5 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 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.
P.K.P./Anushka (K. Vinod Chandran, CJ) (Madhuresh Prasad, J) AFR/NAFR CAV DATE Uploading Date 16.05.2023 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.