M/S Shan Traders vs. The Union Of INDIA

CWJC/3942/2023HC PatnaGSTCNR BRHC01022954202311 April 2023Bench: MR. JUSTICE MADHURESH PRASAD,THE CHIEF JUSTICE-4 pages

AI SummaryPartly Allowed

Facts

The petitioner, M/s Shan Traders, 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 due to the non-constitution of the Tribunal. This prevented them from availing the benefit of stay of recovery of the balance tax amount as provided under Section 112(8) and (9) of the B.G.S.T. Act, which requires a deposit of a specified amount. 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 filing appeals would commence only after the President of the Tribunal entered office.

Held

The Court held that the petitioner should be extended the statutory benefit of stay under Section 112(9) 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 should not be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. The recovery of the balance amount and any steps taken towards it were deemed to be stayed. However, the Court also held that this statutory relief of stay cannot be open-ended. To balance equities, 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 made functional. If the petitioner fails to file an appeal within the period specified upon the Tribunal's constitution, the respondent authorities would be at liberty to proceed in accordance with 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 should be granted the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act, despite the non-constitution of the Tribunal, upon depositing 20 percent of the remaining disputed tax amount in addition to any amount already deposited under Section 107(6) of the B.G.S.T. Act? The petitioner argued that they should not be deprived of this statutory benefit due to the respondents' failure to constitute the Tribunal. The respondents did not record any specific argument against this point, but their actions implied a reliance on the existing statutory framework which was rendered inoperable by the non-constitution of the Tribunal. 2. What is the appropriate duration for such a stay, considering the non-constitution of the Tribunal? The petitioner sought a stay of recovery. The Court considered the need to balance equities and provide a time-bound relief.

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.3942 of 2023 ====================================================== M/S Shan Traders Phulwarisharif, Khagaul Road, Patna through its Proprietor Md. Mohsin Ali, Aged about 48 years, gender Male, Son of S.M. Ali Asghar, resident of Chand Colony, Phulwarisharif, Khagaul Road, P.S. Phuylwari, District Patna. ... ... Petitioner/s Versus 1. The Union of India through the Secretary, Ministry of Finance, Government of India, New Delhi. 2. The Principal Chief Commissioner, CGST, Central Revenue Building, BIrchand Patel Path, Patna. 3. The State of Bihar through the Commissioner, Department of Sate Taxes, Government of Bihar, Patna. 4. The Additional Commissioner, State Taxes (Appeal), Patna West Division, Patna. 5. The Deputy Commissioner, State Tax, Patna South Circle, District Patna. ... ... Respondent/s ====================================================== Appearance : For the Petitioner : Mr. Alok Kumar, Advocate For the State : Mr. Vivek Prasad, GP7 For the Union of India : Dr. K.N. Singh, ASG Mr. Anshuman Singh, CGC ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE MADHURESH PRASAD

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 11-04-2023 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 the Appellate Tribunal (hereinafter referred to as "Tribunal")

2/4 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. This Court is, therefore, inclined to dispose of 3/4 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 Tribunal within the period which may be specified upon constitution of the Tribunal, the 4/4 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.

shashank/sumit- (K. Vinod Chandran, CJ) ( Madhuresh Prasad, J) AFR/NAFR NAFR CAV DATE NA Uploading Date 13.04.2023 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.