M/S Mani Printers vs. Union Of INDIA

Held

The Court held that the petitioner is entitled to the statutory benefit of stay of recovery under Sub-Section (9) of Section 112 of the B.G.S.T. Act, subject to the deposit of a sum equal to ten per cent of the 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 respondents' failure to constitute the Tribunal. The recovery of the balance amount and any steps taken in this regard will be deemed stayed. However, this stay is not open-ended. 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 specified period after the Tribunal's constitution, the respondents will be at liberty to proceed. If the ten per cent deposit is made, any attachment of the petitioner's bank account pursuant to the demand shall be released.

Facts

The petitioner, M/s Mani Printers, filed two writ petitions before the Patna High Court. The petitions concerned the pre-deposit requirement for filing an appeal before the Goods and Services Tax Tribunal. An amendment to Section 112 of the Central Goods and Services Tax Act, 2017, reduced the pre-deposit from twenty per cent to ten per cent for maintaining an appeal. However, the GST Tribunal had not yet been constituted. Previously, this Court had granted relief based on a judgment in SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others, allowing deposit of twenty per cent of the disputed amount and staying recovery until the Tribunal was constituted and an appeal filed.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay of recovery under Sub-Section (9) of Section 112 of the B.G.S.T. Act, subject to depositing ten per cent of the amount of tax in dispute, given the non-constitution of the GST Tribunal by the respondents? The petitioner argued that they should be entitled to the benefit of the reduced pre-deposit of ten per cent and a stay of recovery, as the non-constitution of the Tribunal by the respondents should not prejudice their statutory rights. They relied on the principle that a litigant should not suffer due to the inaction of the authorities. The respondents did not appear to have made any specific arguments against the petitioner's claim for relief in the context of the Tribunal's non-constitution, as recorded in the judgment.