Shree Ganesh Infrastructure A Partnership vs. State Of Bihar

Facts

The petitioner, Shree Ganesh Infrastructure, filed a writ petition before the Patna High Court seeking various reliefs, primarily to avail the statutory remedy of appeal against an order before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act). However, the Appellate Tribunal had not been constituted, preventing the petitioner from filing an appeal and consequently from availing the benefit of a stay on recovery of the balance tax amount as provided 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 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 should 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). The Court reasoned that the petitioner cannot 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 in this regard were deemed to be stayed. The Court also held that this relief of 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 made functional. If the petitioner fails to file an appeal within the period specified upon the constitution of the Tribunal, the respondent authorities would be at liberty to proceed in accordance with law. 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 Section 112(8) and (9) 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 of appeal and the consequential benefit of stay due to the failure of the respondent authorities to constitute the Appellate Tribunal. They contended that they should not suffer due to the inaction of the State. Revenue'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. They did not dispute the petitioner's inability to file an appeal.