M/S Ajit Kishor vs. The State Of Bihar

Facts

The petitioner, M/s Ajit Kishor, a proprietorship firm, 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 was not 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 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 limitation period for appeal would commence only after the Tribunal's President entered office. The petitioner sought relief from the High Court due to this procedural deadlock.

Held

The Court held that the petitioner is entitled to 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 for it will be deemed stayed. However, this stay is not open-ended. The petitioner must file their appeal under Section 112 once the Tribunal is constituted and functional. If the petitioner fails to file an appeal within the period specified after the Tribunal's constitution, the respondents will be at liberty to proceed according to law. The Court relied on a previous decision in 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 under Section 112(9) of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, upon depositing 20 percent of the remaining tax in dispute? Petitioner's Argument: 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 contended that they should not be penalized for a procedural lapse on the part of the authorities and should be granted the stay upon fulfilling the deposit requirement as stipulated in Section 112(8). Revenue's Argument: The revenue acknowledged the non-constitution of the Tribunal and the issuance of the notification under Section 172. While not explicitly arguing against the petitioner's claim for stay, their stance implied adherence to the statutory framework and the notification's provisions regarding the commencement of the appeal period.