M/S Krishna Trading vs. The State Of Bihar

Facts

The petitioner, M/s Krishna Trading, 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 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 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 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 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 shall be extended the benefit of stay of recovery of the balance amount. The Court reasoned that this relief is necessary to balance equities as the delay is attributable to the respondent authorities. The Court also stipulated that this stay cannot be 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 period specified after the Tribunal's constitution, the respondents would be at liberty to proceed. The Court also ordered the release of any attached bank account of the petitioner if the 20 percent deposit is made. 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 deprived of 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 respondent authorities? 2. Whether the petitioner is entitled to a stay of recovery of the balance tax amount upon depositing a specified percentage of the disputed tax, despite the absence of a functional Appellate Tribunal? Petitioner's Arguments: The petitioner argued that they are being deprived of a statutory remedy of appeal and the consequential benefit of stay of recovery solely because the Tribunal has not been constituted by the respondents. They contended that they should not suffer due to the inaction of the authorities. Revenue's Arguments: The respondent State authorities acknowledged the non-constitution of the Tribunal and had issued a notification under Section 172 of the B.G.S.T. Act to address the delay in the commencement of the limitation period for appeals. They did not appear to contest the petitioner's claim for interim relief based on the non-constitution of the Tribunal.