M/S Ved And Company vs. The State Of Bihar

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 by the respondents. The Court directed that subject to the deposit of 20 percent of the remaining amount of tax in dispute (if not already deposited, in addition to amounts deposited earlier under Section 107(6)), the petitioner would be extended the benefit of stay, and recovery of the balance amount would be stayed. This relief was granted in line with similar orders passed by the Court. However, the Court clarified that this 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 the period specified upon the Tribunal's constitution, the respondent authorities would be at liberty to proceed. The Court also directed the release of any attachment of the petitioner's bank account if the 20 percent deposit is made. The Court expressly left undecided the substantive merits of the appeal itself, focusing solely on the procedural impediment.

Facts

M/s Ved and Company (the petitioner) filed a writ petition seeking to avail the statutory remedy of appeal against an order 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 the 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, dated 11.12.2019) 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 constitution and the entry of the President or State President into office. The petitioner sought relief from the High Court due to this procedural impediment.

Key Issues

1. Whether the petitioner can be deprived of the statutory benefit of stay of recovery of balance tax under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondent authorities? 2. Whether the period of limitation for filing an appeal under Section 112 of the B.G.S.T. Act should commence only after the constitution of the Tribunal and the President or State President entering office, as indicated by the State's notification? Petitioner's arguments: The petitioner contended that they were being deprived of their statutory right to appeal and the consequential benefit of a stay on recovery due to the failure of the respondents to constitute the Tribunal. They argued that the notification issued by the State acknowledged this difficulty and provided a basis for relief. Revenue's arguments: 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 removal of difficulties. They did not dispute the petitioner's claim regarding the non-constitution of the Tribunal.