M/S Sri Kanahyajee Enterprises vs. The State Of Bihar

Facts

The petitioner, M/s Sri Kanahyajee 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 (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 per Section 112(8) and (9) of the B.G.S.T. Act. The State authorities acknowledged the non-constitution of the Tribunal and issued an order under Section 172 of the B.G.S.T. Act, stating that the limitation period for filing an appeal would commence only after the President of the Tribunal entered office. The petitioner sought relief from the High Court due to this procedural impediment.

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 statutory 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 shall be extended the benefit of stay of recovery of the balance amount. This relief is granted to balance equities and is not open-ended. The petitioner is 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 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 if the 20 percent deposit is made.

Key Issues

1. Whether the petitioner can 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 Appellate Tribunal by the respondents? (Question of law) Petitioner's argument: The petitioner contended that they are being prevented from availing their statutory remedy of appeal and the consequential benefit of stay on recovery due to the respondents' failure to constitute the Tribunal. They argued that they should not be penalized for this administrative lapse and should be granted the stay on depositing the prescribed pre-deposit amount. Respondent'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 situation, indicating that the limitation period for appeal would commence post-constitution. The judgment does not explicitly record separate arguments from the respondents beyond this acknowledgment and the notification.