M/S Jay Ambey Construction (A Partnership Firm) vs. The Union Of INDIA

CWJC/3602/2023HC PatnaGSTCNR BRHC01018454202310 April 2023Bench: THE CHIEF JUSTICE-,MR. JUSTICE MADHURESH PRASAD4 pages

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Facts

M/s Jay Ambey Construction, a partnership firm, filed a writ petition before the Patna High Court seeking to avail the statutory remedy of appeal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act. The petitioner was unable to file an appeal before the Appellate Tribunal due to its non-constitution. This prevented the petitioner from obtaining a stay on the recovery of the balance tax amount as provided 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 limitation period for filing an appeal would commence only after the Tribunal's constitution and the President's assumption of 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 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 shall be extended the statutory benefit of stay. The recovery of the balance amount and any steps taken in this regard will be deemed stayed. The Court also held that this relief cannot be open-ended. 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 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 according to law. The Court relied on a similar relief 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 Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondents? (Question of law and fact turning on Section 112(8) and 112(9) of the B.G.S.T. Act). Petitioner's Contention: The petitioner argued that they are being prevented from availing their statutory remedy of appeal and the consequential benefit of stay on recovery due to the respondents' failure to constitute the Appellate Tribunal. They contended that they should not suffer due to the administrative inaction of the authorities and should be granted the benefit of stay upon fulfilling the deposit requirements under Section 112(8). Revenue/State's Contention: 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 to address the situation. They did not explicitly argue against the petitioner's entitlement to a stay but rather presented the factual situation and the remedial notification issued.

Sections Cited

Section 112, Section 107, Section 172

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.3602 of 2023 ====================================================== M/s Jay Ambey Construction (a partnership firm) having it registered Office Ward No. - 7, Bandwar, Begusarai, Bihar - 851131 through its Partner Mr. Gajeshbhai Ishvarbhai Moradia @ Gayeshbhai Moradia, aged about 46 years, S/o Ishvarbhai Moradia. ... ... Petitioner 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, Begusarai Circle, District - Begusarai, Bihar. 5. Assistant Commissioner of State Tax, Begusarai Circle, Begusarai. 6. Additional Commissioner of State Tax (Appeal), Darbhanga Division, Darbhanga. ... ... Respondents ====================================================== Appearance : For the Petitioner : Mr. Anurag Saurav, Advocate For the State : Mr. Vivek Prasad, GP-7 For the U.O.I. : Mr. Dr. K.N. Singh, ASG ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE MADHURESH PRASAD

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 10-04-2023 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") under Section 112 of the Bihar Goods and Services Tax Act 2/4 (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 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 3/4 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 respondent- Authorities would be at liberty to proceed further in the matter, in accordance with law.

4/4 With the above liberty, observation and directions, the writ petition stands disposed of.

Rajkishore/ Shyam Bihari/- (K. Vinod Chandran, CJ) (Madhuresh Prasad, J) AFR/NAFR NAFR CAV DATE N/A Uploading Date 11.04.2023 Transmission Date N/A

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.