M/S Maa Rajeshwari Construction PVT. LTD. vs. The State Of Bihar

Facts

M/s Maa Rajeshwari Construction Pvt. Ltd. (the petitioner) 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 Act (B.G.S.T. Act) before the Appellate Tribunal. However, the Tribunal had not been constituted, preventing the petitioner from filing the appeal and consequently from availing the benefit of stay of recovery of the balance tax amount as provided 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 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.

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 Section 107(6) 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 themselves. Consequently, the recovery of the balance amount and any steps taken in this regard were deemed to be stayed. The Court also directed that 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, observing statutory requirements. 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. Furthermore, upon compliance with the deposit and order, any attachment of the petitioner's bank account pursuant to the demand shall be released. The Court also clarified that previously deposited amounts would be accounted for in determining the 20 percent to be paid.

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, upon depositing 20 percent of the remaining tax in dispute in addition to amounts already deposited under Section 107(6)? The petitioner argued that they should not be deprived of the statutory benefit of stay due to the respondents' failure to constitute the Tribunal. They contended that the non-constitution of the Tribunal should not prejudice their right to seek a stay on recovery. The petitioner relied on a previous order of the High Court in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others. The respondent State authorities acknowledged the non-constitution of the Tribunal and had issued a notification to address the issue of limitation. Their stance, as reflected in the court's order, was to facilitate a resolution that balances the petitioner's right to appeal and the revenue's interest, while acknowledging the procedural impediment.