M/S Sanjeev Kumar vs. The State Of Bihar

CWJC/9547/2024HC PatnaGSTCNR BRHC01055862202429 July 2024Bench: MR. JUSTICE PARTHA SARTHY,THE CHIEF JUSTICE-4 pages

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Facts

The petitioner, M/s Sanjeev Kumar, filed a writ petition before the Patna High Court challenging an order and seeking relief due to the non-constitution of the Appellate Tribunal under the Bihar Goods and Services Tax (B.G.S.T.) Act. The petitioner was unable to avail the statutory remedy of appeal under Section 112 of the B.G.S.T. Act, which also prevented them from obtaining a stay on the recovery of the balance tax amount as provided under Section 112(8) and (9). The State authorities acknowledged the non-constitution of the Tribunal and issued a notification (S. O. 399 dated 11.12.2019) under Section 172 of the B.G.S.T. Act, stating that the limitation period for filing an appeal would commence only after the President of the Tribunal entered office.

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 respondent authorities. The Court directed that subject to the deposit of 20 percent of the remaining amount of tax in dispute (in addition to any amount already deposited under Section 107(6)), the petitioner must be extended the statutory benefit of stay, and recovery of the balance amount and any steps taken in this regard will be deemed stayed. This relief is granted in line with similar relief provided in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others. However, the Court also held that this stay 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 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 also noted that if the 20% amount is paid as directed, the attachment of accounts will be lifted.

Key Issues

1. Whether the petitioner can be deprived of the statutory benefit of stay of recovery of balance tax under Section 112(8) and (9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondent authorities? Petitioner's argument: The petitioner contended that they are prevented from availing their statutory remedy of appeal and the consequential benefit of stay due to the failure of the respondents to constitute the Tribunal. They argued that they should not be penalized for a deficiency on the part of the authorities. Revenue's argument: The respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification to address the difficulties arising from it. The judgment does not record specific arguments from the revenue regarding the petitioner's entitlement to the stay, beyond their acknowledgment of the situation.

Sections Cited

Section 112, Section 107, Section 172, Section 109

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Cause title — parties, addresses and appearances

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.9547 of 2024 ====================================================== M/s Sanjeev Kumar through its proprietor Sanjeev Kumar, Son of Krishnadev Kishan, resident of village- Gamraho, P.O.- Maina Gram, P.S.- Mahisi, District- Saharsa. ... ... Petitioner/s Versus 1. The State of Bihar through the Principal Secretary cum Commissioner, Department of Commercial Taxes, Govt. of Bihar, Patna. 2. The Additional Commissioner of State Taxes (Appeals), Purina Division, Purnia, Bihar. 3. The Joint Commissioner of State Taxes, Saharsa Circle, Saharsa, Bihar. 4. The Assistant Commissioner of State Tax, Saharsa Circle, Saharsa, Bihar. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. Shailesh Anand, Advocate For the Respondent/s : Mr. Government Pleader 7 ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHY

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 29-07-2024

The instant writ petition has been filed under Article 226 of the Constitution of India seeking multifarious reliefs.

The petitioner essentially can only avail 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 (hereinafter referred to as "B.G.S.T. Act").

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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. 5. 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.

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If the 20% amount is, as of now, paid or paid as per this order, necessarily the attachment of the accounts will be lifted.

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

avinash/- (K. Vinod Chandran, CJ) (Partha Sarthy, J) AFR/NAFR NAFR CAV DATE N/A Uploading Date 30.07.2024 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.