M/S Friends Mobile vs. The State Of Bihar

CWJC/6134/2023HC PatnaGSTCNR BRHC01028958202328 April 2023Bench: MR. JUSTICE MADHURESH PRASAD,THE CHIEF JUSTICE-3 pages

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Facts

The petitioner, M/s Friends Mobile, was aggrieved by an appellate order dated January 28, 2023, concerning their GST liability. The petitioner contended that only the interest amount of Rs. 1,31,066.00 was disputed, and the admitted and assessed tax had been paid. The petitioner sought to file an appeal before the GST Tribunal, which had not yet been constituted. The petitioner approached the High Court for relief, given the non-functional status of the Tribunal. The State was represented by the Commissioner of Commercial State Taxes and other tax authorities.

Held

The Court held that in the peculiar facts of the case, where the GST Tribunal is not constituted and the petitioner has paid the admitted and assessed tax, the recovery of the disputed interest amount should be stayed. The Court reasoned that Section 112(8) of the CGST Act, 2017, mandates deposit of admitted tax and a percentage of disputed tax for appeal. Since the petitioner claims only interest is disputed and has paid the admitted tax, and the Tribunal is unavailable, a stay on interest recovery is warranted. The Court directed the assessing officer to verify the deposit of admitted and assessed tax and penalty. If only interest is due, any attachment made shall be lifted. The Court explicitly stated that no declaration on law was made, and the order was based on the specific facts. The stay on recovery of interest is to continue until the GST Tribunal is constituted and two months thereafter, within which the petitioner can initiate an appeal.

Key Issues

1. Whether the petitioner is entitled to a stay of recovery of disputed interest amount when the GST Tribunal is not constituted, and the admitted tax has been paid? (Question of law and fact, turning on Section 112(8) of the CGST Act, 2017). Petitioner's arguments: The petitioner argued that they had paid the admitted and assessed tax, and only the interest portion was in dispute. They relied on the fact that the GST Tribunal was not yet constituted, preventing them from filing a statutory appeal. Revenue's arguments: The judgment records no specific arguments made by the State.

Sections Cited

Section 112(8)

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Cause title — parties, addresses and appearances

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.6134 of 2023 ====================================================== M/S Friends Mobile through its Proprietor Md. Quadir Khan, Male, aged about 32 years, Son of Shakil Khan, Resident of Near Sadrunia Masjit, Minhaj Nager, Ward No. 2, Phulwari, Patna District-Patna, Bihar- 801505. ... ... Petitioner Versus 1. The State of Bihar through the Commissioner of Commercial State Taxes, New Secretariat, Patna. 2. Assistant Commissioner, State Taxes, Patna East, Patna, Bihar. 3. Additional Commissioner, State Taxes, Patna East, Patna, Bihar. ... ... Respondents ====================================================== Appearance : For the Petitioner : Ms. Archana Sinha @ Archana Shahi, Adv. For the State : Mr. Vikash Kumar ( SC 11 ) ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE MADHURESH PRASAD

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 28-04-2023 Heard learned counsel for the petitioner and learned counsel for the State.

The petitioner is concerned with an appeal to be filed before the GST Tribunal, which has not yet been constituted. The petitioner was aggrieved with the assessment order which was taken up in appeal, in which, the appellate order dated 28-01-2023 (Annexure-2) was passed.

It is the submission of the learned counsel for the petitioner that only interest liability is disputed as coming out from the assessment order. It is also the submission of the 2/3 petitioner that the admitted and assessed tax has been paid and what is now in dispute, which could be agitated before the GST Tribunal, is only the interest portion which also is Rs. 1,31,066.00/-. We see from sub-section (8) of Section 112 of the Central Goods and Services Tax, Act, 2017 ( for brevity, CGST Act, 2017) that for maintaining an appeal before the Tribunal, the expectant appellant is supposed to deposit in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by the assessee, as per sub clause (a). Sub clause (b) requires a further amount of twenty per cent of the remaining amount of tax in dispute also to be remitted.

In the present case, we do not see any tax having been disputed and even the petitioner says that it is only the interest portion that is disputed.

In the above circumstances, if the petitioner has paid the admitted tax and also the assessed tax, which is due from him, as per the appellate order, then necessarily there shall be stay of recovery of interest till the GST Tribunal is constituted and two months expires from that period, within which time, the petitioner could initiate an appeal before the GST Tribunal.

The writ application stands disposed of.

3/3

It is made clear that we have not made any declaration on law and has only passed an order in the peculiar facts of this case. The assessing officer shall verify the deposit of the entire admitted and assessed tax with penalty, if any, and if only the interest is due, the attachment made shall also be lifted.

shyambihari/- (K. Vinod Chandran, CJ) ( Madhuresh Prasad, J) AFR/NAFR CAV DATE Uploading Date 01-05-2023 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.