M/S. Shivam Enterprises vs. The Union Of INDIA

Facts

M/s. Shivam Enterprises, the petitioner, 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 petitioner was unable to file the appeal due to the non-constitution of the Tribunal. This prevented the petitioner from availing the benefit of stay of recovery of the balance tax amount, which is contingent upon depositing a specified portion of the disputed tax as per 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, stating that the period of limitation for preferring an appeal would commence only after the President of the Tribunal entered office.

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. The Court reasoned that the petitioner should not suffer due to the respondents' failure to establish the appellate forum. Accordingly, the Court directed that subject to the deposit of 20 percent of the remaining amount of tax in dispute (in addition to any amount already deposited under Section 107(6)), the petitioner must be extended the statutory benefit of stay, and recovery of the balance amount and any related steps would be deemed stayed. The Court also stipulated that this stay cannot be open-ended and the petitioner would be required to present their appeal under Section 112 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 attachment on the petitioner's bank account upon compliance with the deposit requirement.

Key Issues

1. Whether the petitioner can be deprived of the statutory benefit of stay of recovery 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 be penalized for the inaction of the respondents in not constituting the Tribunal, and therefore, should be granted the benefit of stay upon fulfilling the deposit requirements under Section 112(8). The petitioner relied on the principle that a statutory right cannot be rendered nugatory due to administrative delays. The respondents did not record any specific arguments against this point, but their actions and the notification issued acknowledged the situation.