Abhay Enterprises 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 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 held 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 an appeal within the period specified upon the Tribunal's constitution, the respondents would be at liberty to proceed. The Court also directed that if the order is complied with and the 20 percent deposit is made, any attachment of the petitioner's bank account shall be released. The Court relied on a similar relief granted in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Facts

The petitioner, Abhay Enterprises, 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 Act (B.G.S.T. Act). However, the petitioner was unable to file an appeal due to the non-constitution of the Tribunal. This prevented the petitioner from obtaining a stay of recovery of the balance tax amount, as contemplated under Section 112(8) and (9) of the B.G.S.T. Act, upon depositing the required pre-deposit. 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 constitution of the Tribunal and the entry of the President or State President into 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 amount of tax in dispute? Petitioner's Argument: The petitioner contended that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay due to the inaction of the respondents in constituting the Tribunal. They argued that they should not be prejudiced by this delay and should be granted the stay upon fulfilling the pre-deposit requirements. Revenue/State's Argument: 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. Their stance implicitly supported the need for the Tribunal to be functional for appeals to be filed and considered.