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

Facts

The petitioner, M/s Maa Rajeshwari Construction Pvt. Ltd., 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, the petitioner was unable to file the appeal due to the non-constitution of the Tribunal. This prevented the petitioner from obtaining a stay of recovery of the balance tax amount, as provided under Section 112(8) and (9) of the B.G.S.T. Act, upon depositing the stipulated amounts. 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, which stated that the period of limitation for filing an appeal would commence only after the President or State President of the Tribunal entered office.

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 steps taken in that regard were deemed to be stayed. The Court also held that this 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 the appeal within the period specified upon the Tribunal's constitution, the respondent authorities would be at liberty to proceed in accordance with law. The Court also directed that if the petitioner complies with the order and pays 20 percent of the remaining disputed tax, any attachment of their bank account pursuant to the demand shall be released. The issue of the exact amount of tax in dispute was not elaborated upon.

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, by depositing 20 percent of the remaining disputed tax amount? 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 respondents' failure to constitute the Tribunal. They contended that they should not be prejudiced by this administrative inaction and should be granted the stay upon fulfilling the deposit requirements. They relied on the principle that a litigant should not suffer due to the delay or inaction of the authorities. Revenue's Contention: The judgment does not record any specific arguments made by the revenue or state respondents regarding the petitioner's entitlement to the stay. However, their acknowledgement of the non-constitution of the Tribunal and the issuance of the removal of difficulties order suggests an understanding of the situation.