M/S Jay Adinath Infrastructure vs. The Union Of INDIA

CWJC/5998/2023HC PatnaGSTCNR BRHC01034446202326 April 2023Bench: MR. JUSTICE MADHURESH PRASAD,THE CHIEF JUSTICE-4 pages

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Facts

The petitioner, M/s Jay Adinath Infrastructure, filed a writ petition seeking 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. However, the petitioner was unable to file the appeal and obtain a stay on the recovery of the balance tax amount due to the non-constitution of the Tribunal. The respondent State authorities acknowledged this issue and issued a notification 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 President of the Tribunal entered office. The petitioner sought relief from the High Court to overcome this procedural impediment.

Held

The Court held that the petitioner cannot be deprived of the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act due to the non-constitution of the Tribunal by the respondents. The Court directed that subject to the deposit of a sum equal to 20 percent of the remaining amount of tax in dispute (if not already deposited), in addition to any amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner shall be extended the statutory benefit of stay. The recovery of the balance amount and any steps taken in this regard will be deemed to be stayed. The Court reasoned that it would be inequitable to penalize the petitioner for a procedural lapse on the part of the respondents. However, to balance equities, the Court stipulated that the petitioner must 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 period specified upon the Tribunal's constitution, the respondents would be at liberty to proceed according to law. The Court noted that similar relief was granted in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Key Issues

1. Whether the petitioner can be deprived of the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondents? Petitioner's Argument: The petitioner argued that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay on recovery of the balance tax amount solely because the Tribunal has not been constituted. They contended that this non-constitution is attributable to the respondents and therefore, the petitioner should not suffer due to this delay. They relied on the principle that a litigant should not be made to suffer for the procedural delays or failures of the authorities. Revenue/State's Argument: 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 removal of difficulties, which effectively postponed the commencement of the limitation period for appeals. They did not explicitly contest the petitioner's right to relief but rather acknowledged the situation.

Sections Cited

Section 112, Section 107, Section 172, Section 109

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.5998 of 2023 ====================================================== M/s Jay Adinath Infrastructure (a partnership firm), having its registered office Flat No. 402, ER C.S. House, Holding no. 78/8A, Ward No. 30, Surya Mohan Thakur Lane, Tilakmanjhi, Bhagalpur, Bihar- 812001 through its partner namely Ketan Arun Kumar Shah (male) aged about 34 years son of Arun Kumar Shah. ... ... Petitioner/s Versus 1. The Union of India through the Secretary, Ministry of Finance, Department of Revenue, having its office at Room No. 46, North Block, P.O. and P.S. North Block, New Delhi- 110001. 2. The Chief Commissioner, CGST and CX, Office at- C.R. Building, 1st Floor, Bir Chand Patel Path, Patna, Bihar. 3. The State of Bihar through Commissioner, BGST, New Secretariat, Patna. 4. Joint Commissioner of State Tax, Bhagalpur Circle, District- Bhagalpur. 5. Deputy Commissioner of State Tax, Bhagalpur Circle, District- Bhagalpur. 6. Assistant Commissioner of State Tax, Bhagalpur Circle, Bhagalpur. 7. Additional Commissioner of State Tax (Appeal), Bhagalpur Division, Bhagalpur. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr.Anurag Saurav For the Respondent/s : Mr.Additional Solicitor General ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE MADHURESH PRASAD

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 26-04-2023 The instant writ petition has been filed under Article 226 of the Constitution of India seeking multifarious reliefs. The petitioner essentially is desirous of availing statutory remedy of appeal against the impugned order before 2/4 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 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.

3/4 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- 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 4/4 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.

M.E.H/uttam/- (K. Vinod Chandran, CJ) ( Madhuresh Prasad, J) AFR/NAFR NAFR CAV DATE NA Uploading Date 28.04.2023 Transmission Date NA

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.