M/S Pradhan Building Material vs. The State Of Bihar

Facts

The petitioner, M/s Pradhan Building Material, 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. However, the petitioner was unable to file an appeal due to the non-constitution of the Appellate Tribunal. This prevented the petitioner from obtaining a stay on the recovery of the balance tax amount, as contemplated under Section 112(8) and (9) of the B.G.S.T. Act. The State authorities acknowledged the non-constitution of the Tribunal and issued an 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 limitation period for filing appeals would commence only after the Tribunal's constitution and the entry of office by its President or State President.

Held

The Court held that the petitioner should be extended the statutory benefit of stay under Section 112(9) 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 Section 107(6) of the B.G.S.T. Act. The Court reasoned that the petitioner should not be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. The recovery of the balance amount and any related steps would be stayed. The Court also held that this relief of 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. The Court also directed that if the conditions are complied with, any attachment of the petitioner's bank account pursuant to the demand shall be released. The Court expressly left undecided the ultimate merits of the appeal.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, and if so, upon what conditions? Petitioner's Contention: The petitioner argued that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay due to the failure of the respondents to constitute the Tribunal. They contended that they should not be prejudiced by this administrative inaction. Revenue's Contention: The respondent State authorities acknowledged the non-constitution of the Tribunal and issued an order under Section 172 of the B.G.S.T. Act to address the situation, indicating that the limitation period for appeals would commence upon the Tribunal's constitution. The judgment does not record specific arguments from the revenue regarding the petitioner's entitlement to a stay in the interim.