M/S A.N. Enterprises vs. The State Of Bihar

Facts

The petitioner, M/s A.N. Enterprises, 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, due to the non-constitution of the Tribunal, the petitioner was deprived of this remedy and the benefit of stay of recovery of the balance tax amount, which is contingent upon depositing a specified portion of the disputed tax as per 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 (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 enters office.

Held

The Court held that the petitioner cannot 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 Tribunal by the respondents. The Court directed that upon the petitioner 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 statutory benefit of stay shall be extended, and recovery of the balance amount shall be deemed to be stayed. This relief is granted pending the constitution of the Tribunal and the petitioner's subsequent filing of an appeal. The Court also clarified that this stay is not open-ended; the petitioner must file their appeal under Section 112 once the Tribunal is constituted and functional. If the petitioner fails to file an appeal within the specified period after the Tribunal's constitution, the respondents are at liberty to proceed according to law. The Court further directed that if the 20 percent deposit is made, any attachment of the petitioner's bank account for recovery purposes shall be released. 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 can be denied the statutory benefit of stay of recovery of the balance tax amount under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondents? The petitioner argued that they are being deprived of a statutory remedy and the consequential benefit of stay due to the inaction of the respondents in constituting the Tribunal. The petitioner contended that they should not suffer due to the respondents' failure. The revenue did not record any specific argument against this point, but the court's directions imply an acknowledgement of the petitioner's predicament. 2. What is the appropriate interim relief to be granted to the petitioner in light of the non-constitution of the Tribunal and the pending appeal? The petitioner sought a stay on recovery proceedings. The respondents acknowledged the non-constitution of the Tribunal.