M/S Namo Narayan Consultants Private Limited vs. The State Of Bihar

Facts

M/s Namo Narayan Consultants Private Limited (the petitioner) filed a writ petition before the Patna High Court seeking to avail the statutory remedy of appeal under Section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act) before the Appellate Tribunal. 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 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, stipulating that the limitation period for filing an appeal would commence only after the President of the Tribunal entered office.

Held

The Court held that the petitioner should be extended the statutory benefit of stay under Sub-Section (9) of Section 112 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 Sub-Section (6) of Section 107 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 steps taken towards it would be deemed stayed. The Court also directed that the petitioner must file their appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional, observing statutory requirements. This was to balance equities and ensure the appeal is considered within a reasonable timeframe. If the petitioner fails to file the appeal within the specified period after the Tribunal's constitution, the respondent authorities would be at liberty to proceed. The Court also ordered the release of any attachment on the petitioner's bank account if the 20% deposit is made. The Court noted that similar relief was granted in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay of recovery of the balance amount of tax under Sub-Section (9) of Section 112 of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal? Petitioner's contention: The petitioner argued that they are being deprived of their statutory remedy and the consequential benefit of stay due to the respondents' failure to constitute the Tribunal. They relied on the principle that a party should not suffer due to the inaction of the authorities. Revenue/State's contention: 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 issue of limitation periods. They did not contest the petitioner's claim for a stay, implicitly accepting the situation created by the non-constitution of the Tribunal. 2. What is the appropriate mechanism to balance equities and ensure that the petitioner's right to appeal is preserved while also providing a timeline for the resolution of the dispute, given the delay in Tribunal constitution?