M/S Trimurti Private Limited vs. The State Of Bihar

Held

The Court held that the petitioner must 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 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. The recovery of the balance amount and any related steps would be deemed stayed. The Court also held that this stay cannot be open-ended. To balance equities, 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 a specified period after the Tribunal's constitution, the respondents would be at liberty to proceed. The Court also directed that if the conditions are complied with, any attachment of the petitioner's bank account pursuant to the demand shall be released. The Court expressly left undecided the substantive merits of the appeal itself, as it was not before them.

Facts

The petitioner, M/s Trimurti Private Limited, filed a writ petition before the Patna High Court 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 Tribunal had not been constituted, preventing the petitioner from filing an appeal and consequently from obtaining a stay on the recovery of the balance tax amount as provided under Section 112(8) and (9) of the B.G.S.T. Act. The State authorities acknowledged the non-constitution of the Tribunal and issued a notification (Order No. 09/2019-State Tax, S. O. 399) under Section 172 of the B.G.S.T. Act, stating that the limitation period for filing appeals would commence only after the Tribunal's President entered office. The petitioner sought relief from the High Court due to this procedural deadlock.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, upon depositing 20 percent of the remaining tax in dispute? The petitioner argued that they should not be deprived of this statutory remedy due to the respondents' failure to constitute the Tribunal. They relied on the principle that a litigant should not suffer due to administrative inaction. The revenue/State did not record any specific argument against this point, but their actions led to the notification acknowledging the issue. 2. Whether the stay on recovery of the balance amount should be open-ended, or subject to certain conditions? The petitioner sought a stay to prevent coercive recovery actions. The Court considered the need to balance equities, given the delay caused by the non-constitution of the Tribunal.