Mishra Enterprises vs. The State Of Bihar

Facts

The petitioner, Mishra 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 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 under Section 172 of the B.G.S.T. Act to address difficulties, stating that the limitation period for appeals would commence only after the Tribunal's President 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 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 would be deemed stayed. This relief is granted to balance equities, acknowledging that the situation arises from the respondents' failure to constitute the Tribunal. The Court also held that this stay cannot 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, observing all statutory requirements. 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 in accordance with law. The Court relied on a previous order in SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

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 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 entering office, as suggested by the respondent's notification? Petitioner's Arguments: The petitioner argued that they are being prevented from availing their statutory remedy of appeal and the consequential benefit of stay on recovery due to the failure of the respondents to constitute the Tribunal. They contended that they should not suffer due to the respondents' inaction and should be granted the stay as if the Tribunal were functional. Revenue's Arguments: The respondent State authorities acknowledged the non-constitution of the Tribunal and relied on their own notification (Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019) issued under Section 172 of the B.G.S.T. Act, which stipulated that the limitation period for appeals would start only after the Tribunal's constitution. They did not contest the petitioner's inability to file an appeal but highlighted the existing notification.