M/S Pooja Traders vs. The Union Of INDIA

Held

The Court held that the petitioner should not be deprived of the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Tribunal. The Court directed that upon deposit of 20 percent of the remaining disputed tax amount, in addition to any amount already deposited under Section 107(6) of the B.G.S.T. Act, the petitioner would be extended the benefit of stay, and recovery of the balance amount would be stayed. The Court reasoned that this relief was necessitated by the respondents' failure to constitute the Tribunal. However, to balance equities, the Court stipulated that the stay would not 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 file the appeal within a specified period after the Tribunal's constitution, the respondent authorities would be at liberty to proceed. The Court also directed the release of any attached bank accounts if the order was complied with and the 20 percent deposit was made from the cash ledger.

Facts

The petitioner, M/s Pooja Traders, 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, 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 (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 appeal would commence only after the Tribunal's President entered office. The petitioner filed a writ petition before the High Court seeking relief.

Key Issues

1. Whether the petitioner can be deprived of the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondents? The petitioner argued that they should not suffer due to the inaction of the authorities in constituting the Tribunal and should be granted the stay benefit upon depositing the stipulated amount. The petitioner relied on the principle that a litigant should not be prejudiced by the administrative failure of the State. The respondents did not record any specific argument against this point, but their actions led to the situation. 2. Whether the stay of recovery should be open-ended, or if there should be a mechanism to balance equities given the delay in appeal filing? The Court had to determine how to manage the situation where the statutory appeal mechanism was unavailable, impacting the recovery process for the revenue.