M/S Prasad Ideal Healthcare PVT. LTD. vs. The Union Of INDIA

Facts

The petitioner, M/s Prasad Ideal Healthcare Pvt. Ltd., 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 Act (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 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 (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 period of limitation for appeal would commence only after the President or State President of the Tribunal entered office.

Held

The Court held that the petitioner must be extended the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act, subject to the deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, in addition to any amount already deposited under Section 107(6) of the B.G.S.T. Act. The Court reasoned that the petitioner should not be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. The recovery of the balance amount and any related steps would be deemed stayed. However, the Court also held that this relief 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. If the petitioner fails to file an appeal within the period specified upon the Tribunal's constitution, the respondent authorities would be at liberty to proceed further. The ratio is that a taxpayer should not suffer due to administrative delays in the constitution of statutory forums, and interim relief can be granted, but with a clear direction to pursue the statutory remedy once available.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal? The petitioner argued that they are being deprived of a statutory remedy due to the respondents' failure to constitute the Tribunal, and therefore, should be granted the benefit of stay upon depositing the stipulated amount. They relied on the principle that a party should not suffer due to the inaction of the authorities. The revenue/State acknowledged the non-constitution of the Tribunal and had issued a notification to address the issue of limitation, implying an understanding of the procedural difficulties faced by taxpayers. The Court also noted a similar relief granted in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.