M/S Simranjeet Singh vs. The Union Of INDIA

CWJC/3697/2023HC PatnaGSTCNR BRHC01019390202310 April 2023Bench: MR. JUSTICE MADHURESH PRASAD,THE CHIEF JUSTICE-4 pages

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Facts

The petitioner, M/s Simranjeet Singh, a sole proprietorship firm, 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 (Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019) 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.

Held

The Court held that the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 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 Sub-Section (6) of Section 107 of the B.G.S.T. Act. The Court reasoned that the petitioner cannot be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. Consequently, the recovery of the balance amount and any steps taken for its recovery were deemed to be stayed. The Court also directed that this relief of stay cannot be open-ended. 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 is entitled to the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, given that the respondents themselves acknowledged this difficulty and issued a notification. Petitioner's argument: The petitioner contended that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay on recovery due to the inaction of the respondents in constituting the Tribunal. They argued that they should not be prejudiced by this administrative failure and should be granted the stay upon fulfilling the deposit requirements as stipulated in Section 112(8) of the B.G.S.T. Act. Revenue/State's argument: The respondents acknowledged the non-constitution of the Tribunal and issued a notification to address the issue of limitation. They did not explicitly argue against granting the stay but implicitly relied on the statutory framework which necessitates the Tribunal's existence for the appeal process.

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.3697 of 2023 ====================================================== M/S Simranjeet Singh (A Sole Proprietor Ship Firm) having its registered office- Uchla, GuruBazar, Barari, District Katihar, Bihar, through its sole proprietor Mr. Simranajeet Singh, aged about 35 years, S/o Harivansh Singh. ... ... 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, Katihar Circle, District- Katihar, Bihar. 5. Deputy Commissioner of State Tax, Katihar Circle, District- Katihar, Bihar. 6. Assistant Commissioner of State Tax, Katihar Circle, Katihar. 7. Additional Commissioner (Appeal), Purnea Division, Purnea. ... ... Respondent/s ====================================================== Appearance : For the Petitioner : Mr. Anurag Saurav, Advocate For the Union of India : Dr. K.N. Singh, ASG Mr. Anshuman Singh, CGC For the State : Mr. Vivek Kumar, SC11 ====================================================== 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")

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.

Sumit/Shashank- (K. Vinod Chandran, CJ) ( Madhuresh Prasad, J) AFR/NAFR CAV DATE Uploading Date 11.04.2023 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.