M/S Cohesive Infrastructure Developers PVT. LTD. vs. The Central Board Of Indirect Taxes And Customs

Held

The Court held that the petitioner cannot be deprived of the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act due to the non-constitution of the Tribunal by the respondents. Accordingly, the Court directed that 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 petitioner shall be extended the benefit of stay. The recovery of the balance amount and any steps taken for it will be deemed stayed. The Court also held that this relief cannot be open-ended. The petitioner must 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 after the Tribunal's constitution, the respondents would be at liberty to proceed. The Court also directed the release of any attached bank account if the order is complied with and the 20 percent deposit is made. The ratio is that statutory remedies should not be denied due to administrative inaction, and a balance must be struck between protecting the assessee's rights and ensuring eventual compliance.

Facts

The petitioner, M/s Cohesive Infrastructure Developers 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 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 respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification under Section 172 of the B.G.S.T. Act to address the difficulty, stipulating that the period of limitation for appeal would commence only after the Tribunal's President entered office.

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? 2. Whether the petitioner can be deprived of the statutory remedy of stay due to the respondents' failure to constitute the Tribunal? Petitioner's Arguments: The petitioner argued that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay on recovery due to the non-constitution of the Tribunal by the respondents. They contended that they should not suffer due to the inaction of the authorities and should be granted the stay upon fulfilling the deposit requirements stipulated for such a stay. Revenue/State's Arguments: The judgment records that 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 to address the difficulties. No specific arguments were recorded for the revenue/state beyond this acknowledgment and the notification.