M/S Sushila Enterprises vs. The State Of Bihar

Facts

The petitioner, M/s Sushila Enterprises, 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. However, the petitioner was unable to file an appeal due to the non-constitution of the Appellate Tribunal. This prevented the petitioner from obtaining a stay on the recovery of the balance tax amount, as contemplated under Section 112(8) and (9) of the B.G.S.T. Act, upon depositing the requisite amounts. 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 Tribunal's constitution and the President's assumption of 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). The Court reasoned that the petitioner should not be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. Consequently, the recovery of the balance amount and any steps taken for recovery were deemed to be stayed. The Court also directed that 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, within a period to be specified. If the petitioner fails to file the appeal within that period, the authorities would be at liberty to proceed. The Court also ordered the release of any bank account attachment if the conditions were complied with. The Court relied on a previous order in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

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, upon depositing a specified portion of the 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. Revenue's Contention: The revenue authorities acknowledged the non-constitution of the Tribunal and had issued a notification to address the issue of limitation. While not explicitly arguing against the petitioner's claim for stay, their actions and the notification indicated an attempt to manage the situation arising from the Tribunal's non-existence.