M/S Sbi Life Insurance Company LTD. vs. The Union Of INDIA

Facts

M/s SBI Life Insurance Company Ltd. (Petitioner) filed a writ petition before the Patna High Court seeking to avail the statutory remedy of appeal against an impugned order before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act. The Petitioner was unable to file the appeal due to the non-constitution of the Tribunal. This prevented them from availing the benefit of stay of recovery of the balance tax amount, which is contingent upon depositing a certain percentage of the disputed tax as per Section 112(8) of the B.G.S.T. Act. 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, stating that the period of limitation for filing an appeal would commence only after the Tribunal's President enters office.

Held

The Court held that the Petitioner should be extended the statutory benefit of stay under Sub-Section (9) of Section 112 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 Sub-Section (6) of Section 107 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 themselves. The recovery of the balance amount and any steps taken in this regard were deemed to be stayed. The Court also clarified that this relief of stay cannot be open-ended. The Petitioner would be required to present/file their appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and made 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. The Court also directed the release of any attachment on the Petitioner's bank account if the order is complied with and the 20 percent of the remaining disputed tax is paid. 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 is entitled to the statutory benefit of stay of recovery of the balance amount of tax 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, in addition to the amount already deposited under Section 107(6) of the B.G.S.T. Act? Petitioner's Contention: The Petitioner argued that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay of recovery due to the respondents' failure to constitute the Appellate Tribunal. They contended that they should not suffer due to this administrative inaction and should be granted the stay upon fulfilling the deposit requirements. Revenue/State's Contention: 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 issue of limitation. While not explicitly arguing against the Petitioner's request for stay, their actions indicated an attempt to manage the situation arising from the Tribunal's non-existence.