P K Traders And Supplier A Proprietary Concern vs. State Of Bihar

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, if not already deposited. 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 would be deemed to be stayed. The Court also noted that similar relief had been granted in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others. However, the Court clarified that this stay cannot be open-ended. 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 avail this remedy within the specified period after the Tribunal's constitution, the respondent authorities would be at liberty to proceed. The Court also directed that if the order is complied with and the 20 percent of the remaining tax is paid, any attachment of the petitioner's bank account shall be released. The issue of the exact period for filing the appeal after the Tribunal's constitution was left to be determined upon its establishment.

Facts

P K Traders and Supplier, a proprietary concern, filed a writ petition before the Patna High Court. The petitioner sought to avail the statutory remedy of appeal before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act). However, due to the non-constitution of the Tribunal, the petitioner was deprived of this statutory remedy and the consequential benefit of stay of recovery of the balance tax amount 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 (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/State President entering office. The petitioner sought relief from the High Court.

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? Petitioner's argument: The petitioner contended that they are being deprived of their statutory right to appeal and the consequential benefit of stay due to the failure of the respondents to constitute the Tribunal. They argued that they should not suffer due to the inaction of the authorities and should be granted the stay as provided under Section 112(9) upon fulfilling the deposit requirements. They relied on the principle that a litigant should not be prejudiced by the administrative delays or failures of the State. Revenue's argument: The judgment does not record any specific arguments from the respondent State authorities regarding the petitioner's entitlement to the stay. However, their acknowledgement of the non-constitution of the Tribunal and the issuance of the removal of difficulties order suggests an understanding of the procedural impediment.