M/S Ashok Trading And Company vs. The Union Of INDIA

Facts

The petitioner, M/s Ashok Trading and Company, 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 respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification under Section 172 of the B.G.S.T. Act, stipulating that the period of limitation for preferring an appeal would commence only after the 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 cannot 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 would be deemed stayed. The Court also held that this stay cannot be open-ended. The petitioner would be required to file their appeal under Section 112 once the Tribunal is constituted and functional. If the petitioner fails to file an appeal within the period specified after the Tribunal's constitution, the respondents would be at liberty to proceed in accordance with law. The Court also directed the release of any attachment on the petitioner's bank account if the 20 percent deposit is made.

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? The petitioner argued that they should not be deprived of this statutory benefit due to the respondents' failure to constitute the Tribunal. The petitioner relied on the principle that a litigant should not suffer due to administrative inaction. The revenue/state acknowledged the non-constitution of the Tribunal and the notification issued under Section 172. 2. Whether the stay of recovery should be open-ended, or subject to certain conditions? The Court had to balance the equities between the petitioner's right to statutory remedy and the revenue's interest in recovery.