Suraj Kumar vs. The State Of Bihar

Facts

The petitioner, Suraj Kumar, is aggrieved by the non-constitution of the Goods and Services Tax Tribunal, which prevents him from filing an appeal as provided under Section 112 of the Bihar Goods and Services Tax Act, 2017 (BGST Act). The petitioner received an assessment order dated January 27, 2021, and a subsequent appeal was dismissed on October 16, 2023. The total tax amount of Rs. 1,69,12,290/- has been fully recovered by the revenue through reversal from the petitioner's electronic credit ledger. The remaining disputed amounts are penalty and interest, which were confirmed in the appellate order. The petitioner contends that he has paid the admitted tax and that the remaining disputed tax has already been recovered, thus fulfilling the conditions for appeal, except for the non-constitution of the Tribunal.

Held

The Court held that the petitioner has fulfilled the pre-conditions for filing an appeal under Section 112(8) of the BGST Act. The Court rejected the revenue's contention that 'tax' includes penalty and interest in the context of Section 112(8)(b). The Court reasoned that Section 112(8)(a) specifically lists 'tax, interest, fine, fee and penalty' as amounts to be paid in full if admitted. Clause (b) then refers to 'tax in dispute'. The Court found that the disputed tax amount had already been recovered by the Department, rendering the deposit of 20% of the disputed tax moot. The Court directed that there shall be no recovery of penalty or interest until the period for filing an appeal expires after the Tribunal is constituted. If an appeal is filed, recovery will only occur after the disposal of the appeal and in accordance with the appellate order. The ratio decidendi is that where the disputed tax has been recovered, and the admitted amounts are paid, the petitioner should not be prevented from filing an appeal due to the non-constitution of the Tribunal, and recovery of penalty and interest should be stayed pending appeal.

Key Issues

1. Whether the petitioner has fulfilled the pre-conditions for filing an appeal before the Tribunal under Section 112(8) of the BGST Act, considering that the disputed tax amount has already been recovered by the revenue. 2. Whether 'tax' as used in Section 112(8)(b) of the BGST Act includes penalty and interest. Petitioner's Arguments: The petitioner argues that he has paid the admitted tax and that the disputed tax amount has already been recovered by the Department. Therefore, there is no remaining disputed tax to deposit 20% of, as required by Section 112(8)(b). He contends that penalty and interest are not part of the 'tax in dispute' for the purpose of the 20% deposit under Section 112(8)(b), and that he is not liable to deposit these amounts as a pre-condition for appeal. The primary grievance is the inability to appeal due to the non-constitution of the Tribunal. Revenue's Arguments: The revenue, through the learned Government Advocate, contended that 'tax' includes penalty and interest. Therefore, the petitioner must deposit the admitted tax, interest, fine, fee, and penalty, and 20% of the remaining disputed tax to maintain an appeal.